Analysts predicted an unenviable prospect for the housing market with the next increase in the key rate

At a meeting on Friday, December 15, the Board of Directors of the Central Bank will most likely raise the key rate from 15% to 16%, and possibly to 17%. This is the forecast of Russian economists. MK found out how the next tightening of monetary policy will affect the cost of apartments and the availability of mortgages in Russia.

Analysts have differing opinions regarding changes in apartment prices. A possible increase in the key rate is unlikely to significantly increase the price per square meter – its growth over three years has exceeded 60% and has reached its peak, says Ekaterina Lomteva, general director of Ricci Residential Real Estate. The cost per square meter until the end of next year will grow by 1.5-2% per month (up to 24% per year), depending on the class of housing, says Dmitry Dolgov, general director of the real estate brokerage agency DOLGOV PRO.

“It’s difficult to predict unambiguously,” says VSN Group CEO Yana Glazunova. – On the one hand, an increase in the key rate should cool demand. As a result, developers will be forced to reduce prices, especially for illiquid apartments. On the other hand, the increase in cost due to the stage of construction readiness, the increase in costs for building materials, and the desire of banks to adhere to the financial model as much as possible will not allow prices to drop significantly.

Even with the current key rate, the cost per square meter cannot decrease, since both working capital and leasing construction equipment are all increasing in price, says Kirill Kulakov, president of the Regional Association of Appraisers. But in general, for the housing market, an increase in the key rate primarily means a decrease in demand for mortgage lending, the specialist emphasizes.

The head of the Analytical Center “Real Estate Market Indicators IRN.RU” Oleg Repchenko says that the situation with prices in the primary market depends on the fate of preferential mortgages: after the completion of the state program on July 1, 2024, significant discounts can be expected on new buildings.

But for the majority of buyers of secondary housing, which are not eligible for preferential mortgages, lending became unavailable after the key rate was raised to 12%. Therefore, its next possible increase will not radically change the situation on the real estate market.

“The sharp increase in the key rate led to a rush and rising prices in late summer – early autumn, while mortgage approvals at the “old” rates were in effect,” says Oleg Repchenko. – In the future, the exhaustion of effective demand and protective rates will put pressure on sales and, accordingly, prices. And in the coming year, secondary apartments may fall in price by 10% or more. But you shouldn’t expect a price revision in the coming months: private sellers, as a rule, need several months to realize changes in market conditions.

The next increase in the key rate increases the chances that square meters in apartments on the secondary housing market will become cheaper, says Managing Director of the Metrium company Ruslan Syrtsov. It is impossible to sell housing in the old stock at rates of more than 17-18% per annum (record values ​​for the last 20 years).

“The monthly mortgage payment will be exorbitant, three times higher than the cost of renting a similar apartment,” says Ruslan Syrtsov. – Owners of secondary real estate will have to sell apartments at large discounts (more than 15%). Only those secondary buyers who have savings and do not need a loan will benefit from this situation.

Will the key rate increase mean the end of the concessional lending program in July 2024?

“Yes, given the increased key rate, subsidies are costly for the budget, and the authorities are now looking for a way to gently curtail the state program,” answers Oleg Repchenko. – But this is not the only reason. The preferential mortgage, which stretched over years, inflated the price bubble and unbalanced the market. Prices for new buildings have become significantly different from the cost of secondary housing, which is fraught with serious consequences, including a banking crisis.

The share of preferential mortgages in some projects reaches 90% of the total lending volume, according to statistics from Deputy General Director of the Garden Ring Group of Companies Ilya Kolunov. At the start of the preferential mortgage program, in the spring of 2020, the key rate was 5.5%, so there was no significant burden on the budget. Now the situation is completely different.

The increase in the Central Bank’s key rate is pushing the authorities to further tighten the rules for issuing preferential mortgages. In the fall, the minimum down payment for obtaining such a loan was already increased from 15% to 20%.

– We expect an increase in the down payment (we would like to hope that the government will decide not on 30%, but on 25%), a reduction in the mortgage limit to six million rubles for Moscow, the Moscow region, St. Petersburg and the Leningrad region (which greatly reduces the opportunity for people to buy housing in these regions, taking into account prices) and the provision of one preferential mortgage “in one hand,” says Natalya Selivanova, Deputy General Director for Mortgage Programs at BEST-Novostroy. – By the way, we consider the last requirement to be correct, since the programs are aimed at supporting Russians, and assistance should not be uncontrolled in volume. In principle, it would be enough to introduce a one-time provision of preferential mortgages, without changing the share of the down payment.

It is highly likely that a decision will be made to abandon large-scale mortgage subsidies for everyone, while maintaining targeted support for certain categories of citizens or regions.

“The authorities may ban or limit the so-called “combo mortgage,” continues Ruslan Syrtsov. – With such a loan, let me remind you, the buyer receives the maximum possible 12 million rubles at a preferential rate (say, 6-8%), and the rest (say, 4 million to buy an apartment worth 16 million rubles) he takes according to the usual market program, that is no preferential rate. Such changes can occur as early as winter. But it is more likely that the tightening of subsidized mortgage conditions will occur after the presidential election.

You definitely shouldn’t expect any activation in the housing construction and mortgage lending market in the near future. And in mid-2024, we will most likely see a new configuration of government support, although less generous in terms of budget spending, experts conclude.