Rising real estate prices. Increased mortgage prices. Stagnation. Forecasts for September 2023.

Rising real estate prices. Increased mortgage prices. Stagnation. Forecasts for September 2023.

Due to the great excitement, any housing that is adequate in terms of price and quality is in demand. For location, type of house, etc. people don’t look, trying to urgently buy at least something, because they think that they won’t be able to buy it later. As a result, any more or less affordable options in all classes and segments are washed out of the market, which leads to the same more or less uniform increase in prices with some bias in favor of the Soviet fund. Apartments in older buildings are usually cheaper, and moreover, recently completed (and more expensive) buildings have to compete with new buildings that can be purchased under preferential mortgage programs.

Price indices for apartments in Moscow are calculated without taking into account luxury housing and atypical apartments, which can distort the overall picture, usually in the direction of increasing indicators. The indices also contain an adjustment to actual sales prices, which makes them slightly lower than inflated supply prices. The surge in demand and housing prices this summer and early autumn was provoked by the weakening of the ruble and an increase in the key rate of the Central Bank.

Over two months, the key rate increased by 5.5% p.p. up to 13% per annum. But the Bank of Russia did not increase the key rate all at once, but in three steps, each of which led to a rapid increase in demand in anticipation of higher loan prices. At the same time, banks did not increase mortgage rates immediately after the key change, but with some delay - so that clients had time to receive approval for issuing a loan at the old rates. Such approval from the bank is usually valid for three months, so even now, when starting mortgage rates in the largest banks have exceeded 14%, and real ones are above 15% per annum, there is still demand in the market. In October-November, when all pre-approved mortgages are sold, purchasing activity on the secondary market will sharply decrease. The remaining demand will go to the primary market, where preferential programs continue to operate, although their conditions are also deteriorating. Of course, there are many alternative transactions on the secondary market that allow you to purchase apartments without attracting a large amount of “real money”.

However, in order to launch a chain of alternatives, you need approximately 20% of buyers with money - their own or, more often, credit. And a mortgage at 14-16% is, in fact, the absence of a mortgage. So in the near future, the secondary market will experience a decline comparable in depth to April-May 2022. Only this time the stagnation may drag on significantly, because if last year the Central Bank, having raised the rate to 20% at the end of February, began lowering it already in April, now the mega-regulator clearly and clearly states that a high key rate, and therefore An unaffordable mortgage will last for a long time.

In addition, during the three-month rush, demand for future periods was greatly depleted, so even if the Central Bank changes its mind and lowers the rate this year, which is extremely unlikely, the market will need time to accumulate new demand.


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