The amount of mortgages will increase 7.6-fold by 2008 compared with 2004, to RUR 151 billion (about $5.3 billion) according to the "Affordable and Comfortable Housing for Russians" project, Yuri Tyrtyshov, deputy head of Russia?s federal agency for construction and housing and communal services, said at a conference on Wednesday.


Last year, about RUR 20 billion (about $700 million) worth of mortgages were issued, and this year has been devoted to developing of the necessary legal acts and determining the project?s budget. Tyrtyshov said the project had been divided into three stages.

By the end of the second stage (2006-2007), housing construction should top 56 million square meters of housing a year, and the amount of mortgages is expected to total RUR 151 billion ($5.3 billion). Interest rates on ruble-denominated loans will not exceed 11 percent. During the third stage, between 2008 and 2010, housing construction is projected to rise to 80 million square meters a year. Mortgages will total RUR 415 billion ($14.5 billion), and interest rates will go down to seven or eight percent. Time on the waiting list for state housing will be about seven years.

Dmitry Glazunov, executive director of Russia?s housing mortgage agency, said the agency expected a sharp increase in the demand for mortgage products. The number of mortgages issued in 2005 is expected to increase to between 70,000 and 80,000 from 40,000 last year. By 2010, the figure will rise to 1 million, the agency forecasts.

As of November 1, 2005, the housing mortgage agency refinanced 24,814 mortgages worth RUR 10.803 billion ($378 million). Mortgage redemption is projected to reach RUR 21.6 billion ($756 million) next year.

At a meeting of the State Council on April 19, Russian President Vladimir Putin said at least one million of mortgages should be issued by 2010. He stressed the necessity of making mortgages cheap and long-term. Putin suggested setting up a national council for housing policy.


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