Russia’s house prices rose by 5.86% during the year to Q3 2020, an improvement from last year’s 3.63% increase and its best showing since Q4 2012. During the latest quarter, nationwide house prices increased 2.7%. Moscow’s house prices were up by 1.52% y-o-y in Q3 2020, an improvement from y-o-y declines of 0.7% in Q2 and 5.85% in Q1. In St. Petersburg, house prices continue to rise strongly by 14.57% during the year to Q3 2020, its biggest y-o-y increase since Q1 2009. Residential investment in Russia totaled RUB 55 billion (US$727 million) in 2019, up by a whopping 70% from RUB 33 billion (US$436 million) worth of deals in 2018, according to the CBRE. In Q3 2020, total housing loans outstanding rose strongly by 18.7% y-o-y to RUB 8.59 trillion (US$ 113.4 billion), following a growth of 17% during 2019, based on figures from the Central Bank of the Russian Federation.
The Central Bank of Russia (CBR) kept its key interest rate unchanged at an all-time low of 4.25%, after four rate cuts this year in an attempt to buoyed the slowing economy amidst the coronavirus outbreak. The key rate peaked at 17% in December 2014. The Russian economy contracted by 3.6% year-on-year in Q3 2020, following an 8% decline in the previous quarter, as the country took a severe hit from the COVID-19 pandemic and related lockdowns, as well as a plunge in oil prices. For the full year 2020 the Russian economy is projected to shrink by about 4% to 5%, following expansions of 1.3% in 2019 and 2.5% in 2018, based on central bank forecast.