Bank of Russia Cuts Key Rate to 20%: Impact on Loans, Deposits, and Real Estate
Impact of Central Bank Key Rate Decision: Anticipated Consequences
In a surprising move, the Bank of Russia slashed the key interest rate from a staggering 21% to a still high 20% on June 6. This marks the first easing of monetary policy in nearly three years, since September 2022. The decision has left many wondering about its implications for loans, deposits, and real estate in the Russian market.
Positive Signals for the Real Estate Market
Dmitry Panov, a prominent figure in the NWFO and St. Petersburg Legislative Assembly, believes the move signifies a positive response to the signs of economic "cooling" in Russia. Yudita Grigaitė, director of marketing at Lenstroytrest, adds that the decision is a clear indication that the trend has reversed and could pique investor interest in the real estate market.
VTB's Take on Deposits
VTB, Russia's largest bank, confirmed that banks would begin lowering deposit interest rates post-announcement. However, Pent-up demand is unlikely to surge unless the key rate dips significantly to 14-15% per annum.
Sergei Terentev, director of the real estate department of the CDG Group, predicts that even with a 2% reduction in deposit rates, deposits would remain an attractive savings tool due to their double-digit yields. A more notable shift to real estate might occur when the key rate drops to 15%.
Persisting Inequality in Mortgages
Sberbank has announced a reduction in mortgage rates, with a range of 2 to 3.5%. Despite the move, market rates remain prohibitively high, making it challenging to revitalize the mortgage segment without the key rate reaching 12-13%.
According to the Unified Information System of Housing Construction "Dom.RF", the average weighted mortgage rate for new housing in top 20 Russian banks was 26.54% as of June 2025. It's a steep price that precludes a drastic increase in demand for mortgages until more significant adjustments are made.
The ongoing trend towards gradual monetary policy easing could be a boon for real estate demand, but it's essential to exercise caution, as rapid changes might lead to social tension and unsustainable price surges. Experts predict a cautious approach from the regulator for the remainder of the year, with a potential reduction to the 17-18% range.
Sources:
- https://tass.ru/ekonomika/14819985
- https://www.rbc.ru/economics/25/06/2025/5eefb2859a7947ef8830c0eb
- https://www.dataflat.ru/market/
- https://t.me/rbc_piter
- https://domrf.by/
As Dmitry Panov and Yudita Grigaitė suggest, the Bank of Russia's rate cut indicates a positive shift for the real estate market in Russia. Sergei Terentev predicts that deposits may remain attractive savings tools, with a more notable shift towards real estate happening when the key rate drops to 15%. However, the high mortgage rates persist, making it challenging to revitalize the mortgage segment without a more significant reduction in the key rate.
