Expert predicts when apartment prices will begin to decrease
In the heart of Eastern Europe, the Belarus real estate market is facing a new reality as mortgage rates continue to climb. This trend, mirroring similar global patterns, is expected to lead to a decrease in buyer activity and downward pressure on housing prices in September 2025.
The increase in mortgage rates makes borrowing more expensive, reducing affordability for buyers. This, in turn, leads to fewer transactions and dampened demand in real estate markets. For instance, in the United States, mortgage rates have remained high around 6.6% to 6.9% during 2025, and new home sales have decreased 8.2% year-over-year, while inventories increased, creating buyer hesitation and downward pressure on prices.
Belarus, closely linked economically and financially to Russia, is likely influenced by similar trends of higher borrowing costs and subdued demand. The broader Eastern European and Russian region is experiencing monetary tightening and high-interest rates, with Russia’s Bank maintaining very high key rates (around 20%) and observing a decline in mortgage lending and construction-related activities.
The stagnant real estate market in Belarus, which has been stagnant for three consecutive months from May to July, is another indicator of this trend. The market's inertia means prices may not decrease immediately, but rather gradually over time.
Three main factors influence buyer activity and prices in the Belarus real estate market: income (in dollar equivalent), credit availability, and overall sentiment. The yield from renting overpriced housing may not be high, but it will be stable in the next five years and certainly higher than bank deposit interest rates.
Many people who wanted to improve their housing conditions bought in July, as they understood that the interest rate reduction was temporary and the dollar at 'three' was unlikely to last. Two factors to watch for in the near future are the dollar exchange rate (population incomes) and consumer optimism.
Natalia Litovskaya, a real estate specialist, predicts that housing prices are unlikely to drop in the near future. Official statistics show that income is growing, but the increase in mortgage interest rates has made housing less affordable for many potential buyers. Interest rates for purchasing "secondary" housing under the "Ipoteka Express" program from Belarusbank have increased to 18.5% per annum for general terms and 16.5% for those in need.
Despite these challenges, the market remains active, with an average of 1,250 apartments sold per month. However, a quarter of deals on the secondary market involve credit, so a decrease in transactions on the secondary market by 8-15% can be expected in September's statistics. Prices on the secondary market may start to decrease by 1-2% in September.
The total amount could decrease by a few thousand dollars in six months, but without loans, their savings would still not be enough. Only high-income individuals who need to borrow an equivalent of $20-30,000 will remain active in the "secondary" housing market.
In conclusion, the rising mortgage rates in Belarus are expected to lead to reduced buyer activity and downward pressure on housing prices, mirroring similar global trends. The real estate market is 15% less active than it was in March, and it will take time for the impact of rising mortgage rates to be fully felt. However, with cautious optimism and careful planning, the market may find a new equilibrium in the coming months.
- The increase in mortgage rates in Belarus, similar to trends observed globally, will make borrowing more expensive and reduce affordability for buyers, potentially leading to fewer transactions and dampened demand in the real estate market.
- As personal finance and investing are closely linked, the subdued demand in the Belarus real estate market due to high mortgage rates could impact the overall economy and investment opportunities in the country.
- In the housing market, factors such as income, credit availability, and market sentiment play a significant role in shaping buyer activity and prices. The stagnant real estate market in Belarus, influenced by these factors, is expected to gradually experience downward pressure on prices in the coming months.
