The Housing Market and Housing Finance in Russia and Its Regions – A Quantitative Analysis
This chapter provides a quantitative analysis of the housing and housing finance markets in Russia and its regions. Russia has experienced a sharp decline in mortgage lending at the end of 2008 and beginning of 2009 as a response to the liquidity problems in international financial markets. The decline in house prices has been, however, only moderate. The chapter focuses on the differences in prices and market conditions in Russia's regional housing and mortgage markets. It identifies the main drivers of housing prices using panel data for 80 Russian regions. Furthermore, the chapter discusses the default experience of mortgage loans during the crisis. The difference in default rates between ruble and dollar-denominated mortgage loans is discussed in connection with the large ruble depreciation in 2008 and 2009.