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RATIONALE FOR MAIN AREAS OF THE STATE ECONOMIC POLICIES IN THE SPHERE OF THE HOUSING CONSTRUCTION IN RUSSIA
Abstract
Today, housing accessibility is low in Russia. This situation is rooted in the following causes: 1. Most Russians are not able to save up for housing. High interest rates on mortgage loans limit the use of mortgage as a tool to finance consumer demand in the housing market. 2. Existing conditions of mortgage programs and high security of the asset, such as real estate, from the market uncertainty lead to increased investment demand, which brings about the continued positive dynamics in housing prices. The authors believe that the government control should be primarily aimed at: 1. Higher availability of mortgage credits as result of consumer demand assessment. To this end, the government may look at state co-financing programs of mortgage lending. 2. Reduced investment demand for housing. It is clear that today sees no trend towards a better geopolitical situation, so the only way is to influence on the real estate profitability by amending taxation. 3. Prevention of cartel agreements between developers to keep unreasonably high prices. 4. Increased construction and reduced price growth dynamics. For this purpose, it is necessary to support and promote fair competition in the industry, which will enable new companies to enter the market. In addition to increased housing availability, developing housing construction will make it possible to greatly intensify investment processes in the whole country, as well as raise income levels and improve quality of life. This results from a significant multiplier effect from investments in real estate and parallel development of industries producing complementary products. Today one of the key areas in the state economic policies should be increased public spending in housing and public support for this industry. It is obvious that over time and with improved living standards in Russia the government should curb its involvement in housing matters.
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