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

Yanina Roshchina and Natalia Ilyunkina ()
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Natalia Ilyunkina: Lomonosov Moscow State University

Russian Journal of Money and Finance, 2021, vol. 80, issue 4, 98-123

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.

Keywords: housing affordability; housing market; housing affordability factors; government measures to support housing affordability; subsidised mortgage rates (search for similar items in EconPapers)
JEL-codes: C10 C50 G28 R10 R21 R31 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.31477/rjmf.202104.98

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