As the Russian mortgage market braces for significant changes in 2024, experts and financial institutions, including the Central Bank of the Russian Federation, are closely monitoring the potential impacts on housing prices and consumer behavior. This comprehensive analysis delves into the various factors influencing the market, offering insights into future trends and their implications for buyers and investors.
The Cooling of the Mortgage Market
The Central Bank of Russia anticipates a cooling of the mortgage market in 2024, a trend characterized by a decline in real estate prices and a decrease in mortgage transactions. This forecast aligns with the broader economic landscape and is influenced by several key factors.
Factors Influencing the Market
Increased Down Payment Requirements:
The Central Bank has indicated that raising the down payment on preferential mortgages to 30% is expected to slow market activity. This measure, coupled with macroprudential surcharges for banks issuing housing loans, aims to stabilize the market.
2. Interest Rate Fluctuations:
The key rate’s increase is poised to significantly impact the mortgage market. The Central Bank projects a more balanced mortgage growth, ranging from 7% to 12%, considering these economic variables.
3. Growth Projections:
Despite a 17.7% growth in the housing loan market in 2022, the Central Bank forecasts a surge ranging from 24% to 27% by the end of 2023, followed by a moderation to 10%-15% in 2025 and 2026.
State-Supported Mortgage Programs
Since 2018, Russia has implemented various mortgage programs with government support, targeting different demographics, including families, IT professionals, and public sector employees. These programs have undergone several changes, especially during the COVID-19 pandemic, to address the fluctuating demand for housing.
The Secondary Market’s Response
The secondary housing market is also showing signs of adjustment. Despite a weekly reduction in advertised prices, experts predict a potential 15% year-on-year decline in prices by the end of 2024. However, sellers are showing reluctance to lower prices significantly, opting instead to temporarily withdraw listings from the market.
Consumer Behavior and Future Outlook
The anticipated changes in the mortgage market are expected to influence consumer behavior significantly. Experts predict a decrease in mortgage demand and transaction numbers, particularly in large cities with high price levels. High mortgage rates on the secondary market are likely to further reduce transactions involving loan borrowers and private apartment owners.
As the Russian mortgage market undergoes these transformations, potential buyers and investors must navigate this evolving landscape carefully. The market’s future hinges on several variables, including interest rates, government policies, and economic conditions. This analysis provides a crucial understanding of these dynamics, aiding stakeholders in making informed decisions in the Russian real estate sector.
