Housing without loans: banks no longer believe in the income of Russians

Sales of developers in Russian cities fell sharply in April 2022, Izvestia reports, citing the numbers of the bnMap.pro monitoring and analysis system for new buildings. The anti-leaders were: Kurgan, where the number of transactions decreased by 97%, Kazan - minus 98% and Volgograd - minus 99%. So far, this process has not affected both capitals too much: in Moscow, the fall was "only" 46%, and in St. Petersburg - 59%. But in other regions it is much higher.

Economist Dmitry Prokofiyev believes that this is not yet a "collapse of the industry":

“In Moscow and St. Petersburg, what has already been built is sold and sold, but the story is characteristic - while the authorities looked towards the industry, resting on “import substitution”, and redirected cash flows, at the same time, real estate sales “slowed down” - and after all, construction is one of key economic drivers of the country.

This is just an illustration of the story that I told - about the studies of Austrian economists from the Complexity Science Hub in Vienna - in the conditions of a break in supply chains, the economy can "crumble" in the most unexpected place - and predict this "shedding" in order to somehow compensate in advance this situation is not possible.

Although, as far as real estate is concerned, the downturn of the market could be predicted, although the dependence here is more complicated than the “raised interest on mortgages - people stopped buying apartments” model.

It's not just about "preferential and regular mortgages" - most likely, banks stopped giving "consumer loans", due to which people "closed" the first installment - and then something happened to them plugging). And "consumer credit" was stopped because banks have no big illusions about people's future incomes and people's ability to service their loans. Plus - the cost of living has increased in relation to people's incomes - and people "stopped pulling" a mortgage payment ... "

But the Volgograd political scientist Alexander Saigin is shocked by these figures:

“Honestly, the fall of as much as 99% in our million-plus real estate sales became discouraging for me. Especially against the background of the fact that our city is generally famous for its unfinished and long-term construction. Who knows, he will understand, some objects in Volgograd were built for 20 or more years. The bridge across the Volga, for example, has not yet been completed, although it was started back in the 90s, and the first two stages were opened as early as 2010. Okay, the bridge. There is a history of a hotel on the Bridge Square, which began to be made in the 80s, and then redesigned into a residential building and handed over somewhere in the middle of the 2000s. There are problems with equity holders, etc etc etc.

I know that some developers in March promptly froze projects and facilities at the preparation stage. Some refused altogether. Such a deep drop in sales suggests that not all facilities under construction will be completed.

But there is also good news. Conventionally, if sales fell from 100 to 1, and next month they rise to 5, then it will be possible to report a fivefold increase in sales..."