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Brace for impact in the Russian real estate sector.

The real estate sector has been accounting for about 10% of Russia’s GDP, but it is now nosediving, due to the withdrawal of Government subsidized 8% mortgages in July of 2024, and commercially available mortgages skyrocketing to between 28% (Sherbank’s offer for the most qualified borrowers) and 43%.

Those unlucky borrowers with variable rate mortgages are suddenly being crushed, with required monthly payments growing 2-4 times higher than at the start of the year. Construction has dropped from an annualized 12% growth rate to 0, in just six months.

The Government no longer has the money to bail out the multiple crises developing in the economy, and costs are going to be paid out of the standard of living of the population - broadly and deeply.

With Russia's budget deficit at 3.3 trillion rubles, 21% key interest rate and 2-3 million job vacancies, Russia has to choose between hyperinflation or an economic freeze, says Vladimir Milov, former Deputy Minister of Energy in an interview with Frontelligence Insight 🧵Thread:

https://x.com/Tatarigami_UA/status/1864016510848573762