Increasing the key rate to 16%. How will this affect the real estate market?
Publication date: 19.12.2023
Experts note that one of the consequences of raising the key rate will be a cooling of the real estate market. This is due to the fact that an increase in the rate will lead to an increase in lending costs, which means a decrease in demand. At the same time, immediately after the increase in the coefficient of regulation, demand may still increase sharply, analysts believe.
The increase in the key rate in August from 8.5% immediately to 12% stimulated demand for mortgages and, accordingly, for the purchase of real estate. Thus, the demand for housing in new buildings increased by 113%, for suburban real estate - by 18%, for secondary housing - by approximately 8%. The real estate market showed similar growth after the key rate was raised in October. It is likely that the market will react in the same way in December, experts say.
In 2023, there was a rush in the real estate market several times, caused by the devaluation of the ruble, an increase in the key rate and an increase in the size of the down payment on a mortgage. Then the surge in demand exhausted the pent-up demand available in the market, so today’s increase in the key rate will not cause such a stir as it did a few months earlier. Market mortgage rates are already prohibitive for many, experts explain.
According to experts, in the long term there may be a decrease in demand by 30% and an increase in the sales period. In this case, the secondary market will suffer the most.
Experts believe that in such conditions it is better to delay purchasing housing at least until the spring of 2024 - this is the date that the Central Bank highlights as a benchmark for a potential revision of tight monetary policy. However, those who plan to take out a preferential mortgage should not wait until 2024, as there is a high probability that many mortgage programs will be curtailed or changed.
It is important to note that the real estate market is influenced by many factors, including economic trends, political conditions, demographic changes and global economic conditions. The Central Bank's decision on the key rate is only one of the elements that determines market dynamics. Therefore, when analyzing the market, it is important to take into account other factors that can have both a direct and indirect impact on the situation in the real estate sector, experts noted.
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