The Russian Government now has a chance to “solve the housing problem once and for all,” Russian President Vladimir Putin said at a meeting of the Council for Strategic Development and National Projects.
According to the President, the country has probably received this opportunity for the very first time. He also believes that it is possible to solve the problem within specific time limits in the foreseeable future. Deputy Prime Minister Marat Khusnullin, who supervises the construction sector, added that 5 mio families will receive housing by 2026.
“There have been no such construction volume and such low mortgage rates since the collapse of the Soviet Union,” says head of analytics at AMarkets Artyom Deyev. “It is true that now we are witnessing the most favorable conditions for providing millions of families with affordable housing. Since the Central Bank lowered the key interest rate last month, mortgage rates have been dropping all over the country, and the average mortgage rate might soon reach 8%; it was planned to achieve such rates only in 2024.”
Citizens are actively using beneficial mortgage arrangements at 6.5% that were proposed by the President as an anti-crisis measure. Residents of the Far East are offered interest rates as low as 2%, while the Rural Mortgage program has 1-3% annual interest rates.
In addition, more housing is commissioned in the country every year, the expert added. From 80 mio to 100 mio sq m of new housing is built every year under the Housing and Urban Environment national project.
As of now, 9.6K buildings and 99.4 mio sq m of housing (with 34.2 mio sq m with the use of project financing) are under construction in Russia.
The Ministry of Construction, Housing and Utilities has developed measures to support the sector. These measures are aimed at maintaining demand, financing construction and planned commissioning of housing in 2020-2021.