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molly picon
20-11-2016, 08:06
Hello, haven't posted in a while, have a question.

What is your opinion of the property situation in Moscow? Is it a good time to buy, specifically for people who really don't have much to spend and who have to take out a mortgage (the rate is apparently 12.9 percent, which to me sounds completely insanely expensive). Husband is looking at an apartment which would basically wind up costing him over twice the initial value as he would get a 15 year mortgage. I've noticed that the amount he would spend on mortgage could rent an apartment twice the size, and there would be no renovations or responsibility.

Benedikt
20-11-2016, 09:45
Hello, haven't posted in a while, have a question.

What is your opinion of the property situation in Moscow? Is it a good time to buy, specifically for people who really don't have much to spend and who have to take out a mortgage (the rate is apparently 12.9 percent, which to me sounds completely insanely expensive). Husband is looking at an apartment which would basically wind up costing him over twice the initial value as he would get a 15 year mortgage. I've noticed that the amount he would spend on mortgage could rent an apartment twice the size, and there would be no renovations or responsibility.

in my opinion BUYING in Moscow is only worth it if you have cash. because then it is YOU who can negotiate. and not the banks who will dictate.
by the way don-t take out a loan i na cheaper valuta currency. except when you also have valuta to pay back the complete loan. if-when you have to exchange rubles to get valuta you might be in for a nasty surprise. as many people where about a year ago. of course they blamed the banks who - told - them now it was the time to take out a cheap loan and pay back... than the Ruble -crashed -...

tasel
28-11-2016, 21:08
I don't see buying an apartment (flat) is Moscow is not a good investment. For a decent apartment within the city, you would be paying a mortgage of 80-100k and 20% - 30% initial downpayment. The monthly installment is average and may add more depending on the size and location, so just as an investment its a bad idea.

Armoured
29-11-2016, 11:12
Is it a good time to buy, specifically for people who really don't have much to spend and who have to take out a mortgage (the rate is apparently 12.9 percent, which to me sounds completely insanely expensive). Husband is looking at an apartment which would basically wind up costing him over twice the initial value as he would get a 15 year mortgage. I've noticed that the amount he would spend on mortgage could rent an apartment twice the size, and there would be no renovations or responsibility.

No opinion on property market. But mortgages at 12.9% need to be compared to inflation and the central bank rate and the deposit rate. I see banks offering just under 10% annually for long-term deposits. 12.9% doesn't sound outrageous to me when you compare to that.

A better comparison is the monthly payment against monthly rent. But if you're going to do that, to be 'fair' you should compare the fact that the mortgage monthly won't go up for the entire 15 years, but the rent will - a not un-reasonable expectation would be to expect it to go up at the rate of inflation. If inflation is 10% a year, then the monthly rent would double in about 7 years.

After looking at it that way, make your own comparison and decide what's important and whether the places are too expensive. But if places are too expensive, it's mostly not because of the mortgage, but because property's overpriced or inflation is high.