RUSSIAN Mortgage Crisis

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In this video I talk about the impact of the recent interest rate increases on the Russian Real Estate sector and how this will hurt the Russian Economy. Real Estate contributes around 10% of Russian GDP and the market has been booming over the past few years due to the introduction of subsidized mortgage scheme in April 2020. This scheme was withdrawn in July 2024 and over the past 18 months mortgage rates have skyrocketed in line with the increase in the official rate of interest. Sberbank, which is Russia's largest mortgage lender recently increased its mortgage rate to 28% and other lenders are offering rates as high as 43%. This huge increase in costs and the removal of subsidized mortgages is having a devastating impact on both the Property Market and the Russian Economy.

For specific details please check out the CHAPTER list below.

Chapters:
0:00 Intro
1:31 CONSTRUCTION
2:47 MORTGAGES
3:34 MORTGAGE RATES
6:21 PROPERTY PRICES
7:31 OUTPUT
8:21 SUMMARY & CONCLUSION

#russia
#ruble
#russianeconomy
#gdp
#rouble
#ukraine
#uk
#pricecap
#GLOBALFINANCIALCRISIS
#RUBLE
#SWIFT
#RECESSION
#CHINA
#USA
#NATO
#WW3
#WORLDWAR3

[lajoyalobos]

The fact that they quit the mortgage subsidization tells us something: they couldn't afford to keep it up with the ongoing and ever increasing war costs. It's the age old "butter vs bullets" conundrum coming into play yet again. You can't have a full blown war economy AND a healthy normal economy at the same time, one has to give way for the other.

[hybridarmyoffreeworld]

There is a reason why in Finnish verb "Ryssiä" (Muscovy ), roughly meaning "to totally fail something".

[madmaxdystopia]

You’d think the only hot real estate in Russia would be cemetery plots.

[jacquelinetaylor]

Building of homes may have gone up in Western Russia but in the rural areas of the rest of Russia people are still living in shacks without indoor toilets or made up roads. Russia is as we say in the north of England is "All fur coat and no knickers"

[dcc]

I wonder how many mortgages went into default because the mortgage holder didn't return from the battlefield

[philipnie]

Listening to Christmas music, watching Joe Blogs videos while seeing the Russian economy slowly dying is such a vibe this year❤😊

[abcd-evjg]

The ruble is turning into RUBBLE. The Russian army is turning into RUBBLE. And now Russian buildings are turning into RUBBLE.

[baeb]

They have an aging population, a declining population, and they are sending an entire generation of Russian men to their doom in Ukraine. Who is buying this housing?

[WorldCitizen]

More good news coming from Mordor. Now we have to wait to hear about burst pipes, crumbling infrastructure....and frostbite!

[joaomarreiros]

Real Estate in Russia comes with an infestation of Poutins, very expensive to get rid of, and very toxic.

[peterpan]

It will be interesting to see what the Russian banks do when the companies building the apartment blocks can no longer sell them and therefore cannot repay the loans to the banks. Then there are the apartment buyers who cannot repay their loans. Whether the Russian central bank will still have enough money to support the big banks when so much money has been poured into the army is also questionable. If I were Russian, I would be very worried about my savings.

[philmcostrich]

Thanks Joe, can't get enough of it!

[truthbsaid]

Here is an interesting footnote: I have an acquaintance in Kaliningrad and close to her house, a developer had been constructing for the past two years a large apartment complex to sell the individual units. But due to the lack of sufficient early sales and the high cost of further construction loans, the entire project was demolished last month. Just empty land now.

[busboy]

It really puts into perspective mortgage rates in the US and other countries over the last 20+ years. Some are now bitterly complaining that some loans are up to 8% now. Imagine looking back on 8% as the good ol' days.

[andrejsasd]

With ~4.5% interest rate, half of my monthly payment goes to cover the interest rate and the other half goes to decrease the loan itself. I can't imagine the interest rate of 30% or 40%. Basically, your monthly payment drastically increases and you can BARELY afford to pay off the interest..

[robinc]

Russian authorities spent "...around 1 Trillion Rubles.." on discounted mortgages.
So around USD$4.13, then?

[cpk]

That construction output chart is insane

[robinwhitebeam]

house prices up by 6% and general inflation 28% means that the real value of property is declining.

[melissabruhn]

Another indicator...another bit of info re: Russian economy. Thank you for explaining comparison to China-subsidy scheme. Belt tightening indeed in property sector. Inflation...is going to go up. GDP down. Thanks Joe! Triple boop! 🥰

[CalgarGTX]

Thing is russia had an almost static population so no great need for a booming construction sector, but the state cancelling subsidy programs is one more nail in the coffin indicating they don't have the 'fiscal freedom' anymore to keep it running.

The more things like this get cancelled the more disgruntled people there will be.

Their publicly shared budget predictions make absolutely no sense. On a static or decreasing tax revenue basis, they plan (on paper) to keep sustaining all their public services and subsidies expenses at previous year level while boosting military expenses like +40%. If you learnt any maths at school, it doesn't work like that...