‘The local mortgage lending market is likely to undergo even more changes in the nearest future. For one, the increase in demand for loans taken to buy places in the suburbs of the city will soon slow down or stop altogether. The potential borrowers’ income makes it impossible for them to acquire a dwelling even on a mortgage; besides, the demand has been affected by some realtors setting unfairly high prices. An apartment, for example, may be offered for 3.2 million RUR whereas it really costs 2.7 million,’ Nikolai Gunchenko of Gunchenko & Co. Real Estate Ltd. said to UrBC.

Sverdlovsk Region’s banks provided their clients with 1,161 mortgage loans (which is 3.25 times better than in 2005) worth 1.068 billion RUR (five times better than in 2005) in January-June 2006. Only 52 mortgages were issued last January, whereas as many as 361 (worth nearly 355 million RUR) were issued in June 2006. As regards the period of January to October 2006, the local banks gave their customers 2.871 billion RUR worth of mortgages, which is 5.7 times better than in January-October 2005.

‘Choosing a mortgage requires handling each borrower’s case individually. The interest rate is undoubtedly the decisive criterion, but the actual chances of being offered a loan also matter. Not infrequently, a mortgage is important for people with not very high incomes and no money for the first installment. In a case like this, bad debt risks are high, so one naturally cannot hope for moderate interest rates,’ Mr. Gunchenko explained.

‘As I said, we help each particular client find the solution that best works for them, which is why we are trying to cooperate with as many banks as possible. There are, however, a number of banks we don’t do business with; for example, we don’t use UralFinPromBank’s mortgage offers since we simply don’t know anything about them,’ he noted.