Expert talks about the impact of maintaining the CBR key rate on real estate

Keeping the key rate of the Bank of Russia at 21% was generally expected and should not significantly affect the primary and secondary real estate markets, Evgeny Belokurov, commercial director of the Yandex Real Estate service, told Izvestia on February 14.

In the second half of 2024, after the completion of the program of mass mortgage with state support, as well as the transition of the Bank of Russia to a new cycle of increasing the key rate from 16% and up to 21% by the end of last year, the real estate market is in a period of adaptation to the new macroeconomic conditions.

Thus, the volume of supply in the primary housing market on average in the cities with a million inhabitants from July 2024 to January 2025 decreased by 2.1%, and the average price for 1 square meter on the contrary increased by 8.3% 179 thousand rubles.

In the secondary market over the same period, the volume of available offers increased by 3.3% on average in the cities-million-ones, and the average price per sq. m. increased by 4.6% to 138 thousand rubles.

Home leverage: Russians have become more likely to take loans secured by housing

Such contracts carry high risks of property loss, experts say

"In recent months, we see that the regulator prefers to use alternative tools to cool lending. Since further rate hikes could be detrimental to businesses, the Bank of Russia has become more active in regulating lending, which may indeed prove to be a more effective tactic to fight inflation over time. At the same time, we should not forget that the current level of the key rate remains a record," the expert said.

At the same time, maintaining the key rate has already led to a decrease in interest rates on deposits in many large banks. This may be a signal that part of savings will not be reinvested in deposits after the end of the deposit period. These funds may well move into the real estate market and create new demand. For now, however, the impact of this money supply on supply and housing prices is seen as limited.

"On the whole, one can see restrained optimism in the preservation of the CBR rate. Although the tightening of conditions for retail and corporate lending is a rather serious measure, experts agree that further rate hikes are already unlikely. For the real estate market, such predictability is rather positive, as the adaptation of all participants to high rates has been going on for the last six months," Belokurov concluded.

Earlier in the day it was reported that the Central Bank (CB) of the Russian Federation kept the key rate at 21% per annum. It is specified that the CBR will assess the expediency of raising the key rate at the next meeting. It will take into account the speed and sustainability of the decline in inflation.