Page 22 - RusRPTDec20

The mortgage market took off in 2008 and recently demand has been stoked by the anti-crisis program of preferential mortgages at 6.5%, and the average rental yield on the housing market in September of 5.5% per year, which exceeded the weighted average yield on deposits for up to a year by 2.25 percentage points, the Central Bank said in its Financial Stability Review. In short an individual investor can make better money from buying an apartment to rent than they can from putting their cash on deposit in a bank.
Moscow City Real Estate prices forecast RUB/1sqm
CBR concerns
In its more recent Financial Stability Review, the CBR for the first time called the flow of retail funds into the stock market a risk for the Russian financial system. This is a natural stage in the development of the market, writes the Central Bank and cites the example of the United States, where securities account for 51% of savings.
The Central Bank lists three associated risks. Firstly, it is the danger of a boom mentality when hype about rising returns cause investors to be incautious when making investment decisions. Secondly, the growing popularity of foreign financial market instruments actually means an outflow of funds from the Russian economy. Third, the growth of citizen participation increases the systemic importance of the stock market: its conjuncture is becoming an important factor in the well-being of people, and their active participation can increase volatility, writes the Central Bank.
The Central Bank calls all these risks limited. Above all, the law on the categorization of investors, which came into force in July 2020, should help to overcome them. It limits the access of unqualified investors who have not passed special tests to shares that are not included in the calculation base of the largest indices, bonds of issuers with a low rating and other high-risk instruments, as well as investments with leverage.
22 ​RUSSIA Country Report​ December 2020 www.intellinews.com