In this paper we will discuss about the mortgage market of Russia. The market is growing rapidly. Many banks in Russia are entering into the mortgage market. The VTB bank set a record for mortgage lending under its mortgage program. The Russian mortgage market is growing rapidly.
The president of the second biggest bank of Russia, the VTB Bank, has said that the present credit crisis in America will have no impact on the Russian mortgage market. The VTB bank claimed a record amount, 3 billion US dollars of mortgage lending under its mortgage program.
The experts predict that mortgage market will expand by almost 15 times within the next two years. In 2004, the market worthed nearly 25 billion rubles. The mortgage market in Russia is all set to almost double in 2008 by reason of increasing wealth among the citizens which drives the demand for better home.
The Russian banks also are offering cheap loans. However, the Russian retail lending market went up to 5% of the Gross Domestic Product in 2005 from the 1% figure in 2002. It is now going towards saturation.
The mortgage business was only 10% of other retail lending products during 2002 – 05 but, it is now increasing rapidly.
The government is taking several measures to establish a market for low-cost housing which will help the lenders to issue almost 4 thousand mortgages per day within 2010.
Many banks, state owned and as well as private, are entering into the Russian mortgage market. It will be much easier for the big banks to collect mortgage pools and issue some attractive securities. Mortgage securities can make money if they are circulated in a proper way.
Last Updated on : 24th August 2013