Khusnullin called the situation with housing prices in Russia difficult to predict

According to the Deputy Prime Minister, high inflation exerts pressure on prices, which results in an increase in the cost of building materials and banking services

The situation with housing prices in Russia is difficult to predict against the background of the abolition of preferential mortgages. This was announced by Russian Deputy Prime Minister Marat Khusnullin in an interview with RT.

“It is difficult to predict the situation with prices. Because, unfortunately, inflation is quite high in our country, and it affects the cost of building materials. At least half of the construction costs are spent on materials. In addition, the cost of banking services will now grow,” Marat Khusnullin said, answering the question of how the cancellation of preferential mortgages may affect prices and developers themselves.

Against the background of the completion of the program, construction volumes will slow down, which causes concern to the government, the Deputy Prime Minister noted. “There have been very good sales in the last year, so there is enough money in escrow accounts to complete the houses that have been started. But this situation may affect new programs,” he admitted.

Also, despite the projected decrease in mortgage issuance to the level of 2021-2022, Marat Khusnullin does not expect a “global, terrible crisis in the industry.” According to him, there will be a complication that will force developers to approach costs more wisely, look for additional sources and financing mechanisms. This should lead to cheaper and faster construction. “We will generally survive this situation. If it is already very difficult, we will offer the government additional measures to support the market,” the deputy chairman concluded.

After the cancellation of preferential mortgages and the transition to market conditions, demand for new buildings fell sharply. For example, in the Moscow region in July, sales collapsed by 40%. The Ministry of Construction believes that with the completion of the program, housing commissioning in the country may decrease. Among the risks that the new construction market may face in connection with the cancellation of preferential mortgages, experts interviewed by RBC-Real Estate called delays in the delivery of houses, deterioration in the quality of construction and a slowdown in the release of new projects.

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