Mortgage rates always follow the key rate of the Central Bank. It also happened this time. Moreover, a trend has appeared for the rise in price of “secondary housing”, which has been going on for more than seven months, Valery Tumin, director of the markets of Russia and the CIS at fam Properties, told Invest-Foresight.
“In my opinion, one of the main drivers of price growth is a qualitative change in the supply structure. The fact is that a couple of years ago there was a rush demand for the “primary housing” – people bought apartments as an investment. Now these lots, already with repairs, massively saturate the market. Their price, of course, includes not only the desired profit of the owner, but also the cost of repairs,” the expert emphasizes.
Of course, these apartments were purchased initially at near-zero mortgage rates. And the owners, of course, are striving to sell them more expensive, Valery Tumin adds.
In addition, another rush of demand followed the sharp jumps in the key rate, and new buildings reacted to it. As applications filed in August continue to be executed, demand continues to grow slightly. Which, in turn, shifted the focus of attention to the “secondary housing“, and it has already begun to rise in price.
“However, in my opinion, this will not form a long-term trend, and demand will normalize by the end of the year,” the specialist predicts.
He also notes that the Cabinet of Ministers extended the family mortgage and even increased its issuance limits, although it raised the down payment. Taking into account that the preferential mortgage programs, which the Central Bank has repeatedly opposed, will gradually curtail – it is the family mortgage that will remain the main tool for stimulating demand. Now demand will be redistributed due to the extension of preferential mortgage programs, and the more expanded circle of borrowers is compensated by an increase of 5% in the down payment.