The recovery of the real estate sector last year and the projected price growth of 6% in 2022 corresponds to the observed dynamics of supply and demand.
Funcas, analytical center, claims that there is no reason to say that a price bubble has formed in the local market or «tthe market is disconnected from the real sector of the economy and the financial capabilities of buyers». However, the organization expects other risks.
It is assumed that the change in the government's monetary policy should restrain the growth of demand, while supply will continue to expand, thus slowing price growth will be caused.
The real vulnerability of the market is not the financial situation of households or the formation of a price bubble (what can be observed in other countries), and the macroeconomic consequences of a possible increase in interest rates on lending in conditions of unpredictable inflation.
At the moment, households are little exposed to the risk of higher mortgage rates, as they take out loans at fixed rates and have more stable employment prospects than in the past. But the desire of these households to take out loans may soon weaken due to the likelihood of introducing more expensive conditions for financing.
On this occasion, Funcas notes: «We are not facing a market shutdown, but rather a slowdown in its growth cycle».
The dynamics of the residential real estate market is the result of deep trends in supply and demand.
Еру уvidence of this is that both real estate prices and the number of transactions are still significantly below the levels that existed before the alleged «bubble». At the same time, the new offer on the market is even further from these levels.