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The housing market in Russian cities and housing construction in 2021

Author

Listed:
  • Malginov Georgiy

    (Gaidar Institute for Economic Policy)

  • Sternik Sergey

    (Moscow State University of Civil Engineering)

  • Kulakov K.

    (Financial University)

Abstract

In 2021, the situation on the Russian real estate market was mainly affected by factors that emerged in the initial period of the COVID-19 pandemic (state- subsidized mortgages, increased state support for developers) and trends that commenced to form in previous years (the expansion of the individual housing construction (IHC) segment as an alternative to blocks of flats (BF)). The growth of real disposable household income by more than 3%, while the government supported the industry and offered preferential mortgages, contributed to high demand for housing, especially in H1 2021. The desire to preserve family capital amid the record inflation rate (8.4%) and rising prices for all types of real estate encouraged Russians to be active on the housing market. In H2 2021, there was a decline in interest in mortgages. Housing lending commenced to shrink on the back of the gradual increase of the Bank of Russia key rate 8.5% by the end of the year against 4.25% at the beginning of the year. In addition, trends in the primary housing market were shaped by an increase in the cost of building materials and land, labor shortages, as well as the tightening of the program of concessional mortgage lending.

Suggested Citation

  • Malginov Georgiy & Sternik Sergey & Kulakov K., 2022. "The housing market in Russian cities and housing construction in 2021," Published Papers ppaper-2022-1211, Gaidar Institute for Economic Policy, revised 2022.
    • Handle: RePEc:gai:ppaper:ppaper-2022-1211
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    File URL: https://www.iep.ru/files/RePEc/gai/ppaper/ppaper-2022-1211.pdf
    File Function: Revised Version, 2022
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    More about this item

    Keywords

    Russian economy; residential property prices; housing market; housing construction;
    All these keywords.

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • H82 - Public Economics - - Miscellaneous Issues - - - Governmental Property
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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