Moscow’s property market is showing signs of life as Russians pile into mortgages ahead of expectations of rising interest rates. Russians have already taken out over RUB2 trillion ($30.5bn) worth of mortgages in the first nine months of this year – more than all the mortgages taken out in 2017 – as mortgage rates defied the central bank rate hikes and fell to an all time low in September.
Real estate is one of the three big drivers of economic growth, but the sector has been flat on its back for most of the last three years thanks to high, albeit falling, interest rates and stagnant growth of personal incomes. What has changed is the Central Bank of Russia (CBR) easing cycle came to an end in September, when the central bank prophylactically increased rates by 25bp to 7.5% on fears of new “crushing” sanctions that may be imposed by the US government in November. (Read more….)