Many Russians believe that today is not the most favorable time to take out loans, including mortgages, and make serious purchases, which, of course, include real estate. This is evidenced by a May VTSIOM study on the economic strategies of the country’s residents
Several conclusions reached by experts of the All-Russian Center for the Study of Public Opinion (VTSIOM), examining the economic sentiments of Russian citizens, are especially important for real estate market players. Today, there is a very pessimistic mood in Russian society regarding the possibility of easily finding a job with the desired salary.
Only a third of the VTSIOM survey participants (31%) believe that it is rather easy to do this, the majority (58%) have doubts about the possibility of getting a well-paid position. And there is no consensus on changes in the salary level in recent years in the society: What is good is that statements about a decrease in this level are less common (16%), but Russians equally note both the increase in salaries for the majority of our fellow citizens (37%) and the absence of any changes (38%).
One of the indicators of the economic situation is the willingness of the population to make large purchases, in particular to purchase an apartment, house or land plot. The decision to make a large purchase is usually based on consumer optimism, confidence in their own financial situation and an overall optimistic perception of the current economic situation.
As the VTsIOM May measurement showed, the consumer confidence index reached a ten—year high of 44 points (in 2014 it was 52 points, after which it fluctuated in the range of 27-42 points over the years). For reference: this index shows how favorable Russians consider the current time to make large purchases, and is based on the question: “Do you think now is a good time to make large purchases, or not?”. The answer “Rather good” is assigned a coefficient of 0.9, the answer “Rather bad” is 0.1, “I find it difficult to answer” is 0.5. The index can range from 10 to 90 points, and the higher its value, the more favorable Russians consider the current moment for large acquisitions.
And yet, only a third of Russians (31%) believe that now is a good time to make large purchases, while 46% of respondents hold the opposite opinion. Zoomers show the greatest consumer optimism today (41% vs 31% among all Russians). “This can be explained both by a smaller number of financial obligations (in this group, as a rule, there is still no family, mortgages, loans) and the lack of “consumer memory”. Unlike older generations, young people did not experience periods of serious economic crises, which did not form a stable “post—crisis pessimism,” VTsIOM experts explain.
The main factor of readiness for large purchases is, of course, the initial level of financial well—being. Every second person in the group with a good financial situation considers the present time to be good for serious acquisitions, and in the low-income audience this indicator is more than three times lower (51% and 15%, respectively).
Another key topic for the real estate market is the activity of the population in the field of lending, which serves as an indicator of confidence in the prospects of personal financial situation, consumer optimism, as well as confidence in the country’s financial system and the economy as a whole. More than half of Russians (66%) are not sure that today is a good time to apply for a loan. 12% think otherwise, which is 4 percentage points less than last year.
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The credit confidence index (which shows how favorable Russians consider the current time for lending, and is calculated according to a scheme similar to the consumer confidence index) in May amounted to 28 points, a year earlier it was slightly higher — 31 points, the last time the mark reached 40 points in 2014. In general, current data indicate a predominance of caution among Russians regarding lending, analysts emphasize.
Moreover, credit optimism remains quite restrained, including among Russians with a good financial situation — 22% (vs 12% among all Russians and 5% in the group with a poor financial situation). The greatest skepticism is shown by low—income citizens — 79% (vs. 66% among all Russians and 51% in the “rich” group), and among the age groups – millennials (73-79%), who are probably somewhat more likely to face the need for loans (including mortgages) due to the peculiarities of their the life period associated with the creation of a family, the purchase of housing and a car, the birth of children.
“There are several possible reasons why consumer confidence and credit confidence indices have demonstrated multidirectional dynamics over the past year: an increase in household incomes, but unwillingness to take on debt obligations, a change in banks’ credit policy (an increase in interest rates), the impact of inflation, and others. In general, the presented indices are influenced by various factors. The growth of consumer optimism may be associated with the current stabilization of the economy, and caution in lending is explained by risks and distrust of the future situation with the financial system,” VTSIOM experts believe.
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