The residential market in Russia will be the driving force behind the country’s entire construction sector in the long term, Macon Realty Group says in a new report, adding that the main reason for Russia’s mortgage boom is the continued high demand of most of the country’s population for improving their housing conditions.
Macon is the Russian member of EECFA (Eastern European Construction Forecasting Association) which conducts research on the construction markets of eight Eastern European countries.
According to the report, mortgage loans, the most common means of purchasing homes in Russia in recent years, had finally strengthened, compensating for the crisis years of 2015 to 2016. Macon’s Andrey Vakulenko said that during this time, mortgage lending was the only way to increase home purchases, as there had been a persisting, significant drop in the population’s income.
“During the first half of 2018, the trend towards growth further strengthened – the volume of issued mortgage loans rose by 68%, and its share in the total number of housing transactions reached a record 54% in the primary market. All this shows the current high demand for mortgage loans,” he says.
In general, said Vakulenko, housing demand in Russia would not be satisfied in the next two or three decades, but it was now especially acute. “The low level of security and dilapidation of a large part of the housing stock create uncomfortable conditions for the lives of many Russians.”
He said that today, about 45% of Russian families wanted to improve their housing conditions, according to a study conducted by DOM.RF, a mortgage lending agency.
According to another survey conducted by the Russian Public Opinion Research Centre in 2017, only about every third family in the country was said to be planning to purchase housing in the next five years.
