«The consumer market is overheated»
Russians have taken out loans for a staggering amount, comparable to the planned budget expenditure for the current year – 37 trillion rubles. There are two reasons for this phenomenon: firstly, record-high demand for preferential mortgages and car loans, and secondly, the growth of real incomes and wages, which allowed people to take on difficult financial obligations quite calmly. The main problem here is the overheated consumer lending market and the sharp increase in the overall debt burden.
In the first half of 2024, the total volume of loans taken by Russians increased by 3.4 trillion rubles, while for the same period in 2023 – by 2.6 trillion, the Central Bank reported. This breakthrough is associated, first of all, with the desire of citizens to get loans in time before the actual cancellation (July 1) of the preferential mortgage program at 8% and the tightening of family conditions. The rate for state programs is not sensitive to changes in the key rate of the Central Bank, which in January-June 2023 was at the level of 7.5% per annum, and in the first six months of 2024 — 16%.
According to the Bank of Russia, lending standards are gradually improving today, which is facilitated by the consistent tightening of its macroprudential policy, with the aim of redistributing loans in favor of less risky borrowers. In particular, since July 1, the regulator has increased macro-surcharges for loans with a full cost of credit of 25-40%% (the indicator takes into account not only the interest rate, but all additional contributions, for example, the insurance fee). But to what extent can these measures cool the market, and how do experts see the most likely scenario for further developments?
«The fact that Russians took out so many loans in the first half of the year was due to the cancellation of preferential mortgages. In addition, demand was fueled by rising salaries. Our economic policy is aimed, first of all, at stimulating consumer demand. And if there is not enough money, people think like this: «No problem, there is where to borrow.» In the future, the trend will decline, but insignificantly. After all, in addition to the mortgage market, there is the automobile market. When fears were confirmed that the recycling fee would increase sharply, the population rushed to buy cars and, accordingly, take out loans again. In value terms, both markets — housing and automobile — are the most capital-intensive. In 2024 and 2025, the budget impulse, the pumping of money into a number of sectors of the economy will continue, and due to this, some categories of Russians will be able to afford to adhere to this model of consumer behavior. But what happens next is unknown. It is unclear what will happen to real incomes, to salaries. The problem is that any loans, even preferential mortgages, have to be repaid sooner or later. I don't see any risks in the short term, but in the medium and long term, they are quite serious.»
«Today in Russia there are regions with a maximum debt burden of over 100%, responsible citizens are forced to take out loans to pay off other existing ones. According to the results of 2023, the share of Russians with three or more loans was 28.6%, with five or more — 8.6% of borrowers. Given the consistently high key rate, which the Central Bank raised to 18% in July, there are few conditions for improving the situation. In addition to the purely economic situation, social factors also influence the pace of lending — millennials (today they make up the lion's share of the working population) are more relaxed about loans. In addition, banks are issuing more and more credit cards, the interest rate on which is traditionally higher than on standard loans. It is easy to get such «plastic», you don't even have to visit the office: cards are ordered online, and employees of financial institutions work «in the field», offering to issue a credit card right on the street, near shopping centers and other places where people congregate.»
«One of the reasons for this is the high popularity of credit cards. Another is the official inflation rate of 9%, which encourages people to turn to banks for borrowed funds to compensate for the rise in prices for goods and services. The trend towards growth in the total volume of loans issued to Russians is likely to continue. However, the pace may slow down due to tightening lending conditions and rising rates. In general, the situation poses significant risks to both the economy and the population, expressed in an increase in overdue debt, a deterioration in the financial situation of borrowers, and a decrease in the stability of the banking sector.»