Central Bank Rate Watch Reflects Mortgage Markets and New Housing Trends
The bank’s decision to adjust the key rate can influence demand in the secondary real estate market. Analysts note that if borrowing costs rise beyond the current level, buyers may pull back on purchases, particularly in markets where mortgage financing represents a large portion of transactions. A prominent real estate professional underscored that more than seven in ten deals in the secondary segment rely on mortgage funds, so higher rates could slow overall activity and tighten competition among buyers.
In contrast, the same expert pointed out that the segment for new construction may react less sensitively to rate changes. This is because many buyers in the new-build market access concessional mortgage programs or other favorable financing terms that can mitigate the impact of a rate hike on upfront affordability and monthly payments.
On October 27, the Central Bank raised the key rate to 15 percent per annum. Market observers described the move as decisive, with some noting that the step may not immediately affect the ruble’s exchange rate, though it is expected to influence consumer financing and market expectations in the near term [citation: RIAMO interview].
As rates move higher, banks have begun tightening mortgage approvals, a trend that could reduce loan availability for households. Experts warn this change might not only constrain access to credit but also push buyers to explore non-traditional or alternative routes to homeownership, potentially reshaping demand across housing segments.
Earlier commentary from economists warned about the risks associated with further increments in borrowing costs, highlighting the potential for slower housing activity and shifting demand patterns as borrowing prerequisites become more stringent. [citation: industry expert analysis]