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Impact of Government Measures to Support Mortgage Lending on Housing Affordability in Russia: Regional Evidence

Author

Listed:
  • Ianina Roshchina

    (Lomonosov Moscow State University)

  • Natalia Ilyunkina

    (Lomonosov Moscow State University)

Abstract

This study investigates housing affordability in Russia: factors of affordability, quantitative indicators, and government support measures. We are especially interested in the mortgage rate subsidy programmes that were implemented in 2015–2016 and 2020–2021 and their impact on housing affordability indicators. In order to evaluate impact of the first programme, we use a model of the real estate market and we decompose the index of housing affordability into different factors. As a result of our econometric analysis, we conclude that, in general, the programme was successful. Data about the second programme are not yet sufficient, so we evaluate its impact by a statistical analysis of the dynamics of the main indicators. We conclude that the impact is ambiguous: up until a particular moment (different in different regions), borrowers could benefit from the programme, but after that moment the increase in housing prices caused by the programme itself were exceeding the benefits from the subsidised rates. In conclusion, we provide some recommendations to improve the effectiveness of government measures to support housing affordability, which could be useful in the development of new programmes.

Suggested Citation

  • Ianina Roshchina & Natalia Ilyunkina, 2021. "Impact of Government Measures to Support Mortgage Lending on Housing Affordability in Russia: Regional Evidence," Russian Journal of Money and Finance, Bank of Russia, vol. 80(4), pages 98-123, December.
    • Handle: RePEc:bkr:journl:v:80:y:2021:i:4:p:98-123
    DOI: 10.31477/rjmf.202104.98
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    References listed on IDEAS

    as
    1. Basten, Christoph & Koch, Catherine, 2015. "The causal effect of house prices on mortgage demand and mortgage supply: Evidence from Switzerland," Journal of Housing Economics, Elsevier, vol. 30(C), pages 1-22.
    2. Dan Andrews & Aida Caldera Sánchez, 2011. "The Evolution of Homeownership Rates in Selected OECD Countries: Demographic and Public Policy Influences," OECD Journal: Economic Studies, OECD Publishing, vol. 2011(1), pages 1-37.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    housing affordability; housing market; housing affordability factors; government measures to support housing affordability; subsidised mortgage rates;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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