The Bank of Russia, the country’s central bank, has now raised rates by 7.5 percentage points since July
Holy crap, 7.5% in (basically) 1 quarter. Imagine trying to buy a house and having your loan repayment amount jumping faster than you can get paperwork filed.
So your comment made me go “lol, imagine buying a house in Russia.” Meaning my preconceptions were that most in Russia didn’t have the means to own a home.
But then I’m like, I don’t actually know that, let’s check it out.
According to this site home ownership in Russia is over 90%. So what you outlined is a real problem for people there, and changes some of my mental picture of Russian life.
I suppose 30 years of mostly declining population has probably significantly reduced the pressure on the housing supply
I still have question how even stagnated population would even pressure housing supply at all.
90% sounds really high? At least compared to the states where it seems a vast majority is renting??
No idea the data on this, just going off my anecdotal experience.
Everything was owned by the state during Soviet times. Then the people got the chance to privatise their homes for pennies. Now everyone is an owner. That happened to all countries which were a part of USSR, not just Russia. Renting is a very weird concept over there. You only rent if: you travel a lot for work, you’re a poor student in a different city and your uni didn’t provide accommodation, or you’re an alcoholic who lost their home.
Source: born and raised in USSR.
90% own houses, but evidently a much lower percentage also own a washing machine, judging from the souvenirs the conscripts have been bringing home
I was surprised as well. It would be worth confirming the dates from a second source, but there are some ready possible explanations for it as well. It could show a large number of multigenerational households. It could relate to the distribution of the population in high and low cost areas (rural vs urban likely). So it does seem high, but not impossible.
Cheers!
If home ownership is 90% that doesn’t sound like a big problem for the country. If only 10% are renting or looking I can’t imagine that would have much of an impact on prices with demand being so low. Business investment is a problem for sure
People have children and need to get a bigger place. Or their children grow up and move out, so they downsize.
Higher interest rates keep people in places that don’t fit them because it’s more expensive to change.
It’s not that I didn’t think anyone had the means, but that there would be a lower percent than they have due to wealth inequality. And yes, we are a product of our environment, and much of the western media covers the bad behavior of oligarchs. I don’t routinely get exposed to contemporary slice of life vignettes of other countries.
Lastly, when you try and shame others for showing that they learn, challenge the internal biases that we all have, and change their own opinions, you only serve to show others the calcified state of your own perceptions.
Offtopic (because it has nothing to do with Russia): in Argentina the inflation of the local currency this year reached at least 100% annual.
But people there use USD fiat for purchasing real estate. And use USD/EUR for saving.
So even if the local currency is a mess, people moves using foreign currency for important transactions.
I wasn’t talking about variable rate loans. I mean by the time you started the process of getting the loan there’d be one interest rate and one expected repayment amount; and by the time you got to signing and locking in the rate it would probably have gone up by about a point and half at that rate.