The Ministry of Construction named the reasons for the rise in housing prices

Vladimir Putin, in his next speech, noted that in a number of Russian regions, real estate prices have jumped by as much as 30% in a relatively short period of time. The President of the Russian Federation expressed his indignation about this and instructed the FAS to investigate the situation in the real estate market and report on the results.

The Ministry of Construction named the factors that led to such a rapid increase in prices for square meters in Russia, especially in the regions.

The situation turned out to be quite difficult: the rise in real estate prices was influenced by several factors at once, and no one can guarantee that this rapid growth will at least stop in the near future.

According to the Ministry of Construction, the key factor that influenced the rise in real estate prices was the restrictions associated with the coronavirus pandemic. In more than 50 Russian regions, according to the ministry, work on construction sites was suspended due to COVID-19.

The situation was further aggravated by the fact that there was a shortage of labor in this industry. As a result, a housing shortage began to form, and a shortage almost always provokes an increase in prices.

In addition to the restrictions associated with the coronavirus, the agency identified another factor in the increase in real estate prices — this is the increase in prices for construction materials in Russia and around the world. Thus, metal prices have increased by 70% in recent months. Other building materials also rose in price, although not so significantly.

In continuation of the topic of the shortage of real estate in the country: according to the Ministry of Construction, the demand for housing in Russia has increased, including due to the fact that mortgage lending has become more profitable and affordable for Russians. And all this against the backdrop of uncertainty in the economy and minimum rates on bank deposits, which force many Russians to consider real estate, if not as an investment tool, then as a means of saving. The skew in the direction of demand with limited supply quite naturally provoked an increase in housing prices.

The ministry notes: today, more than two-thirds of Russian families plan to improve their living conditions. According to experts, by the end of 2030, about 1 billion square meters of housing will be built, and all real estate will be in demand.

Therefore, it is hardly necessary to expect a reduction in prices or at least their stabilization at the current level.

However, the fact that the government of the Russian Federation has paid close attention to the rise in the price of housing, allows us to count on the fact that appropriate measures will be taken, and the situation will be taken under total control.