Real estate professionals predict shifts in property values by 2025
Revised Article:
"Yo, here's the scoop: prices, as far as I can see it, ain't changin' anytime soon. The key reason is simple — there ain't no boost in demand, and that's 'cause the key rate is sky-high and mortgages are tight as a drum. To be real, most transactions will happen with a straight-up purchase or an increase in address-specific mortgages. In spots that allow these mortgages on the secondary market, we might even see a spike of 10-15% in prices over the next year," says the expert.
He went on to explain that prices won't change until the Central Bank adjusts the key rate, which, he reckons, could happen around autumn.
"When the key rate takes a dive, which I reckon could occur around autumn, things are gonna heat up in the real estate game," Konstantin Aprelev shared.
Since October 2024, Russia's key rate has been parked at 21%. On March 21, the Bank of Russia's Board of Directors left it unchanged for the third time in a row. On April 8, Elvira Nabiullina, Central Bank Governor, guaranteed that the high-key rate period ain't gonna last forever.
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Tags:- #Russia- #Prices- #Housing
Enrichment Data:
Based on the available data, the expert's statement does not provide explicit forecasts for Russian housing prices or Central Bank's rate changes in autumn 2024. Here's some context to help you understand the current economic conditions shaping the housing market:
- Economic Slowdown: Russia's economy is under pressure, with a GDP growth rate dropping to 1.9% YoY in early 2025 compared to 4.3% in 2024, and inflation hovering above 10%[1][4]. This economic slowdown and high inflation put a squeeze on housing affordability.
- Monetary Policy Context: Although the data does not specify autumn 2024 rate changes, it shows that the Central Bank is maintaining strict monetary policy to contain inflation, which is far above its 4% target[4]. Lower growth projections (1.5% for 2025)[1] and lower Brent oil price estimates ($68/barrel)[2] might restrict fiscal and monetary maneuverability.
- Housing Market Factors: According to the OECD, housing price drivers include rent-to-price ratios and income affordability[3]. However, in Russia's present economic climate, high inflation whittles down real incomes, and tight monetary policy raises borrowing costs, which could dampen housing demand.
Without specific predictions for housing prices or details for autumn 2024 rate decisions, the outlook for Russian housing prices seems to depend on:- Persistent inflation hitting real incomes[4].- Slower GDP growth limiting wage increases[1].- Oil price volatility impacting government spending power[2].
- Konstantin Aprelev suggests that a decrease in the Central Bank's key rate could stimulate growth in the real estate market.
- The expert predicts that the key rate may decrease around autumn, potentially leading to an increase in housing prices of up to 15% over the next year.
- If the key rate decreases as predicted, Konstantin Aprelev believes that this could result in increased investing in housing-market and real-estate opportunities.
- The tight mortgage market, due to high key rates, has been a significant hindrance to transactions in the housing market, but this might change if the key rate is adjusted.
- The current economic conditions, such as high inflation and slow GDP growth, have significantly impacted housing affordability and demand in Russia, but changes in the key rate could potentially alter this trend.
