New homes in Russia’s capital regions (Moscow, Moscow Region, St Petersburg and Leningrad Region) have started to go down in price.
RIA Novosti reports that, according to VTB Deputy Chairman of the Management Board Anatoly Pechatnikov, who commented on the real estate market after recent changes in the terms of concessional mortgages, prices have dropped significantly.
Pechatnikov said that, since June, the prices of new apartments in Moscow and the Moscow Region have gone down 7%. The prices have dropped even further, by 10%, in St Petersburg and the Leningrad Region.
VTB’s deputy chairman noted that this trend is a result of changes in the concessional mortgage terms. The concessional mortgage program has been extended to July 1, 2022, but the maximum loan available at 6.5% is now RUR 3 mio ($41K), for all regions.
Previously, home buyers could take out up to 6 mio ($82K) at the concessional interest rate. The amount was even higher (RUR 12 mio ($164K)) for properties in Moscow, the Moscow Region, St Petersburg and the Leningrad Region.
The recent changes in the concessional mortgage terms have changed the structure of demand for real estate. The share of apartments costing RUR 4 mio ($54.6K) or less has increased, from 23% to 30% in Moscow and the Moscow Region and from 51% to 61% in St Petersburg and the Leningrad Region, as an example.
The mortgage market growth rate is slowing down as well. Compared to June 2021, the market is currently showing a 15–20% decline.