Regions in Primorye rank highest in affordability for family mortgages
In a recent assessment, the regions of Yamalo-Nenets and Khanty-Mansi Autonomous Okrugs, Kamchatka, Magadan, and Murmansk have been ranked as the most affordable for mortgage-financed housing purchases, as reported by RIA Novosti.
Experts have compiled the "Rating of the Affordability of Housing Purchase by Families through Mortgages," which highlights the percentage of families capable of buying a typical two-room apartment with a mortgage. Regions with a higher proportion of such families, including the aforementioned regions, have ranked at the top.
To analyze regional differences in the ability of families to purchase homes through mortgages, experts studied the data and constructed the rating. The regions of Primorye ranked 72nd on this list. In federal subjects that topped the rating, the proportion of families that can afford to buy an apartment with a mortgage ranges from 28.6% to 49.3%. This financial accessibility is attributable to both higher wages, as observed in regions of Western Siberia, and lower housing prices in these areas compared to other regions.
Several national republics exhibit outlier positions in the rating, which can be explained by traditionally large family sizes and higher unemployment rates within these regions, resulting in lower corrected family incomes and average family incomes after accounting for the minimum subsistence level for each family member.
Interestingly, regions with relatively low positions in the general rating, like Ingushetia, hold better positions among families with two working parents and a child. Meanwhile, regions with overpriced housing compared to demand, such as the Nizhny Novgorod and Rostov regions, have affordability levels below 10%.
Factors contributing to the leadership of these Russian regions in housing purchase affordability for families through mortgages include:
- Lower housing prices relative to local incomes, aligning more favorably with the average income of families
- Strong economies driven by natural resource extraction industries such as oil and gas, which result in relatively high wages for local populations
- Lower real estate market pressure and less speculative demand, thereby contributing to more stabilized or lower housing prices
- Longer mortgage terms and more manageable interest rates in regions with lower housing prices, which result in a lower monthly payment burden for homebuyers
In stark contrast, families in Russia's major cities face significant challenges in affording housing due to escalating prices[1]. The comparatively lower costs of housing and favorable economic conditions in the regions reviewed here contribute to their high rankings in the affordability of mortgage-financed housing purchases.
Business experts Have analyzed the affordability of housing purchase by families through mortgages in various regions, and the results showed that regions with lower housing prices, such as Yamalo-Nenets, Khanty-Mansi Autonomous Okrug, Kamchatka, Magadan, and Murmansk, have better financial accessibility due to their lower prices and strong business sectors, particularly those driven by natural resource extraction.
The affordability of mortgage-financed housing is an important factor for families in their business decisions, and regions that offer more financial flexibility in this area allow more families to participate in the housing market, contributing to the strength of the local business environment.
