Growth in property prices in Russia should not wait
According to statistics, in the first six months of 2018, the volume of granted mortgage loans in rubles grew by 68% yoy to 1, 556 trillion. With that figure in the secondary housing market grew by 82% to 926,7 billion. The increase in the number of mortgage transactions is associated with a decline in mortgage rates this year, they dropped below 10%.
But, apparently, the process of reducing interest rates was over. The Central Bank of Russia has suspended the reduction of the key rate, and by the end of the year is not excluded, that it will start raising rates. Against this background, it is expected to raise mortgage rates. They have already started to grow – the average rate on mortgage loans in July, 9.57 percent from 9.48 percent in June. We can assume that demand for mortgages also gradually decline. Most of those who wanted to buy housing in the mortgage, already done it this year.
The share of mortgage deals from a number of real estate transactions in recent years has increased from 30% to 50%. So, the probable decrease in the number of mortgage loans will result in a significant reduction in demand for real estate. Accordingly, growth of cost of square meter in the near future should not wait.