Nabiullina Explains How Key Rate Cut Will Affect Housing Market

© Банк России

During a press conference, journalists asked Central Bank Chairwoman Elvira Nabiullina about the impact of the key interest rate reduction on the housing market. It turned out that the market had hoped for a reduction of the key rate to 10% or lower to make mortgages more affordable. However, this did not happen.

Nabiullina responded that there were no grounds to expect a rate of 10%.

"We published forecasts, the latest one was 12-13%. But the housing market is now becoming more active, and we see that the share of market mortgages is not very large, and even market mortgages are starting to grow with the easing of monetary conditions. As for financing developers themselves, there is a special mechanism in combination with escrow accounts, and they are currently receiving loans at low rates of around 11%. Mortgages are also recovering. The share of sales paid for with personal funds and the share of installment payments have increased compared to last year and are now declining. Mortgages are growing by about 1% per month, which is a balanced growth," commented the Chairwoman of the Central Bank.