If there is an urgent need for housing, you should not postpone the purchase in anticipation of more attractive lending conditions. Experts spoke about this aif.ru.
Today, market mortgages are quite expensive, as the key rate reaches 16% per annum. Therefore, there are not so many people willing to buy secondary real estate. However, on February 16, 2024, the next meeting of the Board of Directors of the Bank of Russia is expected, at which the future fate of the refinancing rate will be decided.
However, most economists and experts agree that the reduction of the Central Bank’s key rate will not happen this time and, most likely, not even during the next meeting, she said realtor Anna Season. “The Central Bank is not saying that it will lower the key rate. But you need to understand that if you are buying an apartment now, when there are very few buyers on the market, you can bargain. For example, in St. Petersburg, bargaining even goes on for several million rubles, more than 10% of the cost of the property. Also, from previous experience, we know that many large banks refinanced the mortgages of their own clients at a lower rate so that they would not go to other credit institutions for attractive conditions. In general, when the key rate becomes lower, the mortgage interest rate will also decrease, which means many buyers will appear on the market. Of course, not as much as when the rate was less than 10%, but this number will increase. Sellers will not be inclined to bargain, they will have a larger choice, more viewings of properties, apartments may become more expensive, and bargaining will stop. Therefore, my advice is simple – you need to buy housing when there is a need for it, and if the key rate decreases, go through the refinancing procedure with another bank,” Season said.
He also advises not to delay the purchase of real estate in case of urgent need. Doctor of Economic Sciences, Professor of the Russian Economic University. G.V. Plekhanova Natalya Prodanova. However, if the transaction is planned for cash and is not urgent, the expert recommends finding another use for the money. “I think that on February 16, 2024, it is more likely that the Central Bank will keep the key rate at 16%. If we are considering the option of buying an apartment with available funds on the secondary housing market, we can wait a little. The secondary market has already dropped significantly, but this is not the bottom yet. An even greater decline in prices can be predicted in March. According to expert estimates, finished housing will fall in price by an average of 5-10%, depending on the liquidity of the property. Considering that interest rates on bank deposits are really “tasty” now, the housing transaction can be postponed for a month or two. Of course, provided that there is no urgent need to purchase housing. If such a need still exists, it is also a good time to purchase real estate. Sellers willingly agree to a discount if a buyer with cash appears on the horizon,” the expert explained.
For those considering a purchase using mortgage financing, the expert advises to carefully evaluate market mortgage rates. “They are quite impressive now. Considering that the Central Bank is expected to reduce the key rate by mid-2024, the cost of housing loans will also fall. Only those who are confident in their financial capabilities and have the lion’s share of the start-up capital can dive headfirst into the debt hole,” Prodanova clarified.
Deputy Chairman of the State Duma Committee on Economic Policy Artem Kiryanov added that under current conditions, the most optimal solution would be the new buildings market. “Now we need to focus on mortgages in new houses. Regardless of the refinancing rate, this market has the ability to flexibly respond to demand and provides favorable offers to the buyer at the time. I think that in 2024 the key rate will decrease and, accordingly, this will also open up new opportunities for mortgage lending. But those who made a principled and calculated decision do not need to wait for this reduction. A rate reduction may narrow supply in the primary market, affecting the approval of preferential mortgages. In general, it must be emphasized that today we are fine-tuning the mechanisms for preferential housing lending. It is necessary to restore order in the banking sector, in terms of their claims for additional funds and budgets, and also to unify the requirements for the borrower while preventing cartel agreement on the part of credit institutions,” the expert noted.
Previously, experts predicted a boom in the market for new buildings.
This news article has been translated from the original language to English by WorldsNewsNow.com.
You can visit the original source at the link below.
Original Source Link