Mortgage Overpayment Reaches 10 Million Rubles
Updated Median Mortgage Payments Soar to Record Highs
By April 1st, the average mortgage payment climbed to an all-time high of 4.4 million rubles, according to the Central Bank. This represents a 10% increase since the beginning of the year.
The average mortgage term hovers around 26 years. Taking out a home loan for that amount and a 30% interest rate with a 20% initial downpayment would result in total repayments of 14.4 million rubles. This makes housing loans exorbitantly expensive for the majority of families, according to a financial analyst at Freedom Finance Global, Vladimir Chernov.
Housing Crisis Looming: Families Struggle with Expensive Properties
In just under two years, Russia could face a housing shortage, causing property prices to soar. The government is considering offering installment plans when purchasing pre-built homes from developers and upon the building's completion and entry into service.
- Potential Housing Deficit: A looming shortage of housing units might emerge in the country. As a result, real estate prices are expected to rise. Proposed initiatives include reductions in mortgage repayment rates and extended terms for home loan borrowers.
While the details of these government measures are yet to be announced, it's worth noting that historically, the Russian government has heavily subsidized mortgages, influencing the growth of mortgage lending[2].
Moreover, economic measures such as caps on public transportation fares and limits on tariffs for heating, water supply, and wastewater services aim to control inflation and maintain affordable living costs[2]. Russia is also investing in infrastructure projects like airport modernization and shipbuilding to enhance economic development and potentially influence housing demand by improving regional connectivity[5].
Recently, the Central Bank of Russia has flagged concerns over a potential housing bubble. The slowdown of mortgage lending due to the conclusion of large-scale subsidy programs has helped alleviate this risk, but specific new measures to combat rising property prices or address the housing shortage are not yet detailed in the current data[1].
For more tailored solutions related to the housing shortage and increased property prices, we await further announcements from the Russian government. The potential rise in housing costs could strain the budgets of many families, making it even more challenging to secure an affordable, spacious apartment in a city like Yekaterinburg.
- Amidst the escalating housing crisis, the government looks to minimize financial strain on families by proposing initiatives such as reduced mortgage repayment rates and extended terms for home loan borrowers.
- Despite the looming housing shortage, economic measures like subsidized mortgages, capped public transportation fares, and limited tariffs for utilities aim to alleviate the burden of expensive properties and maintain affordable living costs.
