If the Central Bank interest rate remains high (currently 16%), mortgage issuance volumes will fall two to three times in 2024 compared to 2023. This forecast was given to socialbites.ca by BitRiver’s economist and communications director Andrei Loboda, who commented on the decline of mortgage issuances to four-year lows in 2023.
The economist associated this result with banks’ high interest rates on commercial mortgages (up to 25%), as well as with the Central Bank’s tightening of requirements for borrowers under preferential programs, in which the down payment increased to 30% of the cost. new housing.
“This trend will continue with high mortgage interest rates. The cancellation of the preferential mortgage program from July 1 will have an additional negative impact on the dynamics of the mortgage market. The resumption of growth in mortgage demand may come against the backdrop of a downward revision in the interest rate by the Central Bank. But this will not happen before mid-autumn this year,” Loboda said.
He added that by autumn in 2024, there will be signs of cooling rather than overheating in the Russian real estate market. Loboda concluded that the high interest rate froze the credit market.
In Russia, housing loan issuance fell to the minimum level of four years in the first two months of 2024, reported RBC according to Frank RG statistics. In the January-February period of this year, Russian banks approved a total of 598.4 billion rubles of housing loans. Less mortgages were issued in the country only in the same period of 2020 – 498.5 billion rubles.
Formerly in the State Duma guess Increase in the number of mortgage rejections to Russians.
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Source: Gazeta
Ben Stock is a business analyst and writer for “Social Bites”. He offers insightful articles on the latest business news and developments, providing readers with a comprehensive understanding of the business world.