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Putin Target Rate Aligns With Mbs To Spur Market Boom

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http://www.bloomberg.com/news/2013-08-21/putin-target-rate-aligns-with-mbs-to-spur-market-boom.html

Alexander Vasilyev, a 34-year-old engineer at a Moscow construction firm, says the 12 percent rate on the 15-year mortgage he took to buy his first apartment last December is “totally crazy.” President Vladimir Putin agrees.

Putin, 60, signed a decree last year to cap rates at 2.2 percentage points above inflation by 2018 and predicted loan costs will drop to 6.5 percent in a few years. While the decree has so far had little effect -- inflation slowed to 6.5 percent in July while the average home-loan rate rose to 12.7 percent this year from 12.3 percent in 2012 -- the trend may reverse as lenders sell more mortgage securities, according to Absolut Bank, which forecast a drop of 1 percentage point.

..

Sales Double

The size of Russia’s mortgage market pales in comparison with peers, amounting 3.2 percent of gross domestic product in January, according to the mortgage lending agency. In Poland, outstanding home loans comprise 21 percent of GDP, the banking regulator KNF’s data show, with the ratio soaring to more than 100 percent in the Netherlands, according to its central bank. Russia, the world’s biggest energy-exporting nation, is striving to spur mortgage lending to 7.2 percent of economic output by 2015, according to a 2030 strategy program adopted three years ago.

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Russia’s lenders, including the nation’s biggest banks OAO Sberbank and VTB Group, took cues from the growing demand to increase their mortgage portfolios by 34 percent last year to 2 trillion rubles, according to central bank data.

The disease is global, everyone wants to get rich off property and the banks are all too willing to give out the credit.

It's easy money what can possible go wrong with everyone being property spivs.

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Sad. Russia still has an enviably low private debt load. I guess the rothschildists have corrupted him too. Shouldnt be too surprised. Putins love for Russia is shadowed only by his lust for power. If the banksters promise him that...

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