in which city to buy – Business – Kommersant

What is happening with real estate prices in Russia and in which large cities you can buy affordable housing – in the material “Kommersant”.

Buying a home as an investment in real estate

Investing money in the purchase of real estate in 2022, the Russians considered a reliable way to save money. So, according to In a June survey by DOM.RF and VTsIOM, 72% of the country’s residents said that buying real estate would be a more profitable investment than bank deposits. Most families would like to buy a home for their own residence and not for investment purposes.

With the onset of an unstable situation in the foreign exchange market, the acquisition of commercial and residential properties has become a popular and affordable tool for saving savings. 77% of Russians declared their readiness to buy real estate of various types if they have enough funds. Of these, 49% would invest in the purchase of housing, 21% – in land, 7% – in commercial real estate. Another 15% would renovate their homes. Also, 66% of respondents who are ready to buy housing said that they would live in it themselves, 29% would rent it out, another 2% would resell it at a higher price.

To receive passive income, you must first make an investment or take out a mortgage loan, and after buying a home, find tenants, making a monthly profit from renting an apartment, thereby covering the loan.

What is happening with real estate prices in the country now

According to SberIndex data for January-December 2022, the price per 1 sq. m. on actual transactions in the primary market reached 136.4 thousand rubles. The increase in value over this period amounted to about 18.8%. In the secondary market, the price for 1 sq.m. the price for actual transactions reached 92.9 thousand rubles. In January-December 2022, the cost increased by 9.7%.

Rising prices, interest rates and inflation encourage citizens to buy secondary housing.

In which major cities of Russia you can now buy affordable housing

According to experts, the cheapest housing is sold in regions with low incomes and quality of the housing stock, migration outflow of the population, an unfavorable environmental situation, but there are many other reasons for the low cost. The purchasing power of Russian citizens differs sharply: some can afford to invest in expensive real estate, while others save up for years for a down payment.

According to Rosstat data for the fourth quarter of 2022, the most expensive apartments on the primary market are sold in Moscow, St. Petersburg and the Leningrad Region, and the cheapest square meters are in Kabardino-Balkaria, Dagestan and Karachay-Cherkessia.

As for the secondary market, the most expensive real estate is in Moscow, the Krasnodar Territory and St. Petersburg, and the most inexpensive is in the Orenburg, Smolensk regions and Ingushetia.

What to consider when buying a home in another city

Tatyana Polidi, Executive Director of the Institute for Urban Economics Foundation:

“The choice of a place to live depends on a large number of parameters of a person’s preferences, not only on the price of housing. Housing affordability is measured by the ratio of housing prices to the income of the population in the city. Not only in Russia, but also in the world, in the most developed and economically successful cities, housing is the least affordable (for example, the leaders in terms of housing inaccessibility are Vancouver, San Francisco, and in Russia – Moscow, St. Petersburg). This is due to the fact that the more money is invested in infrastructure, the urban environment, the higher the income and the more developed the labor market, the higher the inflationary processes in the housing markets – in principle, the better we live, the more expensive our assets, including residential ones. And there is nothing wrong with this from a macroeconomic point of view.

As noted above, low affordability usually indicates good rather than bad living conditions, while high affordability often indicates depression in the economy. Therefore, high housing affordability cannot be the only factor in moving.”

Anastasia Cheremisina