It is becoming increasingly difficult for residents of the country to buy their own apartment every year: the growth of household incomes does not keep pace with the rise in housing prices, and for most citizens, the purchase of real estate is postponed indefinitely.
Experts say that in recent years, housing in Russia has become less affordable. “In terms of what we are currently building, we are at an absolute bottom. It has never been so bad in terms of what a normal person can afford to buy, taking into account mortgages and all subsidies,” Mikhail Matovnikov, chief analyst at Sberbank, head of the bank’s Financial Analytics Center, said the other day. He provides the following data. Over the past four years, the number of meters that a Russian could purchase using a mortgage for a median salary has decreased by 6 “squares”. So, if in 2020 it was possible to buy 31.8 sq. m in the primary market, today it is only 25.8 sq. m. In the secondary market, the situation is even sadder. There, the possibilities decreased by 9 “squares”.
HOUSING PRICES SPURRED BY PREFERENTIAL PROGRAMS
There are reasons for the problem of purchasing real estate, or rather, for reducing the availability of its purchase. The rise in prices for new buildings in 2020-2021 significantly spurred preferential mortgage programs. On the one hand, they helped keep our construction complex afloat and made the purchase of housing more affordable compared to 2019, and on the other hand, they led to an increase in housing prices. According to the head of the Central Bank, Elvira Nabiullina, since the beginning of 2020, when there were massive mortgage programs with state support, and until the beginning of 2023, prices in the primary real estate market have doubled. It turns out to be a vicious circle: the availability of preferential mortgages has generated a huge demand for apartments in new buildings and led to an increase in their cost and the creditworthiness of Russians. As a result, the program, which was supposed to enable Russians to buy affordable housing, began to work the other way around. By and large, state support has made mortgages more affordable for Russians, but not the housing itself.
RUSSIANS’ INCOMES ARE NOT KEEPING UP WITH THE RISE IN PRICES FOR “SQUARES”
Another important reason for the decline in housing affordability is the level of salaries. Although they have been growing for the last four years, they certainly are not as warm as square meters. From January 2020 to May 2024, prices for new housing rose by 111% on average, for secondary housing by 77%, and salaries increased by an average of 71% over the same period, according to statistics. In order to catch up with the cost of housing at least a little, salaries need to grow by at least 30%, which, as you might guess, is unrealistic. Let’s add here the fact that far from gigantic incomes of citizens are being eaten up with great appetite by rising consumer prices for products, goods and services.
Do not forget about other factors that affect the value of real estate. Today, the cost of construction in a third of Russia’s regions is 81.3-156.7 thousand rubles per 1 sq. m. The final cost of the “square” is influenced not only by constantly rising prices for construction and installation work and building materials, but also by the cost of land, the cost of connecting to communications, obligations to build social infrastructure facilities, interest on loans, deficit construction specialists and, as a result, an increase in their wages, and finally the profit of the developers themselves (their revenue from the sale of housing in just five months of this year increased by almost a third in annual terms – up to 1.9 trillion rubles).
What will happen to housing affordability next? It is difficult to predict, but something will definitely change, because from July 1, the two main preferential programs will expire. And if the family mortgage may continue to work under new conditions, then a mortgage for new buildings with state support at 8%, which everyone could use, will no longer be available. Only targeted programs will remain – Arctic, Far Eastern, rural and IT mortgages.
Economists do not expect the effect of the cancellation of preferential mortgages until mid-autumn, when prices in the primary market are expected to gradually decline. But the Institute of Economics of the city believes that the completion of a preferential mortgage for the primary may lead to a decrease in the availability of housing with borrowed funds. Experts, however, make a reservation: everything will depend on the level of inflation, the Central Bank’s key rate and real incomes of the population. Given that so far there are no prerequisites for the first two positions to decrease and the third to grow, housing is unlikely to become more affordable for Russians in the foreseeable future.
Elena Khakimova
Photo: LEGION-MEDIA
English 
Russian 
German 
Polish