What profitability can bring investments in new buildings using a loan, how to choose the right object and what nuances should be taken into account when repaying the debt ahead of schedule?

Andrei Kolochinsky,
Managing Partner, VectorStroyFinance

Mortgage is considered the most popular way to improve housing conditions. Few people consider a mortgage loan as an opportunity to invest in real estate, allowing not only to fix, but also to increase their savings.

Rates down, prices up

Until recently, due to high interest rates, it was unprofitable for private investors to use this tool: overpayment on a loan leveled the growth in housing costs. Over the past year, the decline in mortgage rates in the primary housing market has led to the fact that mortgage rates are at historic lows. At the same time, there is a steady increase in prices for new buildings, so that even people who do not have enough money for a one-time purchase of real estate, with a competent approach, have a chance to invest at the construction stage and earn money.

How does the rise in prices for housing in new buildings correlate with interest rates on loans? For 2019, the price of 1 sq. m in the capital's new buildings of the mass segment increased by an average of 8%. In 2020, growth continued even during the period when restrictions were in place due to the spread of the coronavirus and construction was not working.

So, according to the results of the first half of 2020, the average price in the primary housing market in Moscow increased by 4%. And this growth happened only due to inflation: if you follow how prices change as construction readiness approaches, in three years from the foundation pit to the moment of commissioning, the rise in price can reach 30%.

But this is not the limit. An additional price increase can ensure the choice of an apartment in a little-known project at the excavation stage, when the developer deliberately lowers the cost in order to draw attention to his residential complex, or the opening of a new metro station in the development area: a qualitative improvement in transport accessibility adds up to 10% to the initial cost.

While developers are raising prices in their projects, mortgage rates, on the contrary, are declining: from 10% in the summer of 2019 to a record 6.5% under the subsidized mortgage program in April 2020. In reality, it will be possible to issue a loan on even more favorable terms: for example, Rosbank issues loans at a rate of 4.35% under the subsidy program (for payroll clients, subject to the conditions of the Preferential New Building program).

When buying some new buildings, you will be able to find products with a rate of 0-0.5% for the first year of lending or a reduced monthly payment for the period of building a house.

And families with children should not look for special offers at all: they have a family mortgage program with a rate of 4.5%.

Return interest and stay in the black

Low rates are far from the only advantage of mortgages in the face of economic turbulence. You don't have to be a financial analyst to predict high inflation over the medium term. What does such a forecast mean for a mortgage borrower?

WHEN THE RUBLE DEVALUES, THE COST OF GOODS AND SERVICES WILL GROW, THE SIGNIFICANCE OF THE MONTHLY PAYMENT WILL DECREASE, BUT THE PRICE OF THE APARTMENT IN THE AGREEMENT WITH THE BANK WILL REMAIN UNCHANGED.

As a result, under favorable circumstances, after the completion of construction, it will be possible to sell the apartment with a mark-up of at least 30%, repay the bank debt ahead of schedule, return part of the interest paid for the use of funds and remain with a profit.

In order not to be unfounded, I will give a specific calculation. 

EXAMPLE

With an average cost of a one-room apartment at the initial stage of construction of 6 million rubles and a down payment of 20%, the loan amount will be 4.8 million rubles.

At a rate of 6% and a loan term of 10 years, a relatively comfortable monthly payment will be approximately 53 thousand rubles. Over the entire period of servicing the loan, the overpayment to the bank will reach 1.5 million rubles. In case of early repayment of the debt, the bank will not receive interest that is accrued on the remaining amount and term of the loan. Thus, the overpayment for three years while the house is being built is about 800 thousand rubles.

Due to changes in construction readiness and inflationary growth, the price of an apartment by the time it is put into operation may reach 9–9.5 million rubles.

In the event of its sale, even if tax is paid on the difference between the price in the DDU and the value in the sale and purchase agreement, the owner will remain in the black and receive a net profit of at least 2 million rubles.

Ways to earn

How to increase the amount of income? In case of early repayment of the mortgage, the client has the right to apply to a credit institution with a request to return part of the interest paid, since with an annuity payment system, the bank charges interest in advance for the entire time of using the funds in the first years of servicing the loan. But according to the legislation, payment should be made only for the period of actual use of the loan.

Important: it is possible that you will have to act through the courts, and only the interest that the borrower paid will be returned. The difference received with the help of subsidies from the state is not taken into account in the calculation.

And in conclusion, one more piece of advice to the owner who does not want to sell the apartment before the expiration of the tax period (five years), but is not going to spend a decent part of the salary on servicing the loan for a long time. In this case, it would be reasonable to rent out the finished apartment. From an economic point of view, this is beneficial, since the size of the mortgage payment remains unchanged over the years, and the amount of rent is indexed annually depending on inflation.

Convenient selection of apartments on cian.ru

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