The price of new buildings in Russia increased by 4.7% compared to last year, reaching 142.7 thousand rubles. This is evidenced by data published by SberIndex and Domklik on average prices per square meter for actual mortgage transactions in the Russian regions of Sber for October 2023.
Thus, second home prices increased by 8.1 percent. Monthly growth was 2.2% in new buildings and 1.4% in secondary buildings. According to experts, the trend of accelerating monthly price growth for both types of housing has intensified and returned to levels not seen in the real estate market since the spring of 2022.
At the same time, stronger growth was observed in the primary market than in the secondary market for the third month in a row. New building prices increased in 70 regions during the month and reached historical maximums in 56 of them.
Senior General Manager – Director of the Financial Analytics Center Mikhail Matovnikov noted that the deterioration of market conditions for obtaining mortgages in the primary and secondary markets contributed to a sharp increase in demand for mortgages on expectations of further increases in interest rates and the introduction of their implementation. New restrictions by the regulator.
“Mortgage issuance in August-October 2023 reached record levels in the entire history of the Russian market. September issuances were 37% higher than December 2022. “October issuance will also be higher than December 2022, but lower than August-September 2023,” he said.
Sberbank’s Domklik department manager Alexey Leypi reminded that some important changes have occurred in the housing loan market in recent months.
“First of all, the Central Bank’s interest rate was increased to 15 percent. Secondly, the Russian government changed the minimum down payment for basic preferential programs to 20%. Third, there was a new wave of increased macroprudential requirements for housing loans in October.
“Of course, the combination of these factors should lead to a significant cooling of the market,” he thinks.
According to him, currently there is a decrease in mortgage issuances compared to August and September, but prices continue to rise due to inertia, since changes in the dynamics of issuance are still moderate.
“We are likely to see a change in price trend as the supply of pre-approved applications decreases and the decline in demand becomes more pronounced. “An additional incentive for price adjustments could be the redirection of buyers to more budgetary segments of the market, for example, the individual housing construction market,” Leipi concluded.