Last month’s decline compares to a 43% drop in value and a 36% drop in the number of mortgage loans recorded during the COVID-19 pandemic in April 2020, The Moscow Times reported.
Russian banks hiked mortgage rates after the country’s central bank more than doubled its key interest rate to 20% following President Vladimir Putin’s deployment of troops to Ukraine in February. The key rate has since fallen to 14%.
Experts say the high interest rate is driving demand for mortgage loans down. Some banks reported large shares of their mortgage loans were part of government-subsidized programs, The Moscow Times reported.
Read next: Economy may have turned corner, credit data shows
Market watchers say the Russian mortgage market’s future depends on the government’s willingness to expand its subsidy program. The mortgage rate has dropped from 12% to 9% under the current program, which has been extended to the end of this year. Russia also launched a scheme offering a 5% rate to tech workers – who are reported to have fled the country in great numbers following the Ukraine invasion – until 2024, according to The Moscow Times.
Comments are closed, but trackbacks and pingbacks are open.