Russian housing market isn’t as good as the Western one, President of Association of Russian Banks says

26 October 2007 (09:51)

The Association of Russian Builders and the National Association of Mortgage Market Players held a meeting on October 22, 2007 in order to discuss the state of events at the international financial markets and the way the U.S. mortgage crisis could affect this country’s mortgage lending market.

Reports were made by Vladimir Ponomarev and Nikolai Koshman, who had just come back from the States, and by Russian Mortgage Accepting Company’s Deputy General Director for Legal Issues Alexander Kazakov and Deputy General Director for Analytics Sergey Kaduk.

'In the West, the legal issues, things related to industry, building materials, city planning, employee training and so on are worked through efficiently. As for Russia, unlike the U.S., we don’t have any federal housing authority, any legal or scientific foundation, or proper personnel training. Unfortunately, I feel Russian housing market is definitely not as good as the Western one at the moment,’ President of the Association of Russian Banks Nikolai Koshman said.

'The American mortgage crisis is a warning: making loans artificially affordable for low-income groups can lead to grave consequences, and we just can’t repeat their mistake. This crisis has affected both the U.S. and Europe and led to attracted resources becoming more costly. This means it will be difficult to raise the mortgage lending volumes without perhaps increasing the interest rates. So, I think some increase is to be expected, but I don’t believe it will be dramatic. And, anyways, the main reason for mortgage loans being so unaffordable in Russia is the housing prices on the market,’ said Vice President of the Association of Russian Banks Vladimir Ponomarev.

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