Russian home prices up 73% in three years, official warns

Russia should be more efficient about urban planning and eliminate administrative barriers to help reduce home prices, Vitaly Mutko, the head of a financial institution for the development of the housing sector, has said.     

Speaking at the Eastern Economic Forum (EEF) in Vladivostok, the Dom.rf chief noted that residential home prices in Russia have jumped by 73% in the past two to three years and urged the authorities to take steps to lower costs.     

“We can talk about the net cost [of housing] but the market should be balanced, supply and demand, first of all. Households’ incomes and their purchasing power should grow as well of course,” Mutko argued.     

There’s a “range of tools” that can be deployed to balance Russia’s real estate market and drive prices down, according to Mutko. In particular, he suggested “competent master planning and the use of urban planning potential.”    

The official highlighted the importance of efficient engineering at the stage of construction in order to help contain prices and make homes more affordable for Russians. He also urged the authorities to cut excessive administrative barriers for developers.     

“And of course, there’s marketing and kickbacks that also have to be removed, this is also included in the price,” he concluded.     

Mutko also proposed reducing mortgage rates for large apartments, adding that over 50% of new apartment blocks are studios and one-bedroom flats, which are not suitable for families with children.

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