Home ownership in Russia

I have noticed that home ownership rate in Russia is very high at 87%. In Germany it is 51% and I have seen rates as low as 43%

Do you think it's a good thing?

Walther von Oldenburg wrote:I have noticed that home ownership rate in Russia is very high at 87%. In Germany it is 51% and I have seen rates as low as 43%

Do you think it's a good thing?

I think it is because Russians are more family oriented and the collective west is not.
Also it is a good investment.

I think it is a good thing.

Walther von Oldenburg wrote:I have noticed that home ownership rate in Russia is very high at 87%. In Germany it is 51% and I have seen rates as low as 43%

Do you think it's a good thing?

Is this seriously being asked? Of course it's a good thing. Owning something rather than paying someone else to use it is far better.

It's due to the way private property was introduced post-USSR in terms of property ownership.

During the USSR, depending on factors like job, marital status, children, etc, you were assigned a "free" apartment by CPSU. This was assigned to you specifically, but not necessarily "yours", there was no such thing as selling the apartment and buying another, or moving to a different one.

After the dissolution and introduction of private property, there was a period where you applied and had the apartment permanently transferred into your possession under your name, you received the rights to sell and purchase property, across the Russian Federation.

There is no mortgage on these apartments either, only standard services like water, electricity, etc. Which is nice, but on the other hand, these apartments were first constructed as temporary housing post-war, and aren't exactly great by modern standards and expectations of housing, they are also incredibly old at this point, and have long served past their expiration date.

Which is why across Russia there is a vast, government funded renovation program, outright offering residents the choice of either keeping the old apartment or receiving a brand new and completely free apartment(or a large sum of money) and having the old demolished for new structures to take it's place.

House prices here are stupid... even as late as the early 1980s you could build a brand new house for $30K... these days that wouldn't even buy the section.

People are buying houses and demolishing them and building 3-4 flats on the large old sections, but the flats are not even cheap... 700K each, so instead of one house they might get 900K for, they get 2.1 to 2.8 million.... minus probably 500K to build the flats...

It is mental.

You start life these days with a 30-60K debt called a student loan and then work minimum wage while you climb the job ladder... you might never get your own home except if your parents die... but their care in old age might burn up that money anyway...

The problem is that there is too much money to be made selling houses and renting houses, and when people do that to earn a living then the prices and rents are only ever going to go up.

x_54_u43 wrote:

After the dissolution and introduction of private property, there was a period where you applied and had the apartment permanently transferred into your possession under your name, you received the rights to sell and purchase property, across the Russian Federation.

And that is why all post-communist countries are very high in that rating because similar and/or the same mechanisms used to be applied to all of them.
There was one more form of ownership transfer, very common in some socialist states - that was a cooperative.
In theory, the cooperative ownership was not pure ownership per see, but after the system transformed in the 90s, it became known as a "limited ownership right" in Poland - you own a space bordered by the walls of your home, but not the land and the cooperative infrastructure attached. Still, this was transferred again in the 00s to the full ownership, with some small pennies needed to be paid for that.
Germany is very low in that ranking, still, the result is pumped up by the GDR incorporation, where people get their homes just as in any other socialist state, so that alone brought +/- 4-5 mln owned flats to the system.
That is why I find particularly funny any comparison and deductions how poor we used to be here in the USSR, Poland, Czechoslovakia or GDR, when functionally all of the families lived in their own homes. And all of them were brick&concrete ones, not made by plywood like in the wealthy rich Murica.
What's more, in the USSR functionally half of the families owned a dacha. Dacha is a suburban piece of land, where they relaxed on weekends, growing tomatoes.
And not only in the USSR, dachas were common in all socialist states as well, you can easily find them in all of them. In the GDR those were called "Garten", and some of them are located in the middle of Berlin now. In Poland, the name of it was "family gardens", administrated by the country-wide union, and you can find those in the city centers as well.
So yes my American friends (not talking to you, Murican morons), you must realize that weird fact, that you were teached to consider as "poor" people who owned a brick made homes and a land parcels in the suburbs, without a single cent of credit. Add to that a social welfare, free education up to the master degree (and system that was paying you a salary if you considered to go up further), free healthcare, subsidized heat&electricity - and you will get all the "poverty" picture.

Walther von Oldenburg wrote:
Do you think it's a good thing?

If you're a neoliberal rentoid who gets off on forking half his disposable income to some landlord (after the government puts dibs on the first half), sure, its bad, literally hitler. For the rest of us:

GarryB wrote:House prices here are stupid... even as late as the early 1980s you could build a brand new house for $30K... these days that wouldn't even buy the section.

People are buying houses and demolishing them and building 3-4 flats on the large old sections, but the flats are not even cheap... 700K each, so instead of one house they might get 900K for, they get 2.1 to 2.8 million.... minus probably 500K to build the flats...

It is mental.

You start life these days with a 30-60K debt called a student loan and then work minimum wage while you climb the job ladder... you might never get your own home except if your parents die... but their care in old age might burn up that money anyway...

The problem is that there is too much money to be made selling houses and renting houses, and when people do that to earn a living then the prices and rents are only ever going to go up.

Real estate has become an investment vehicle in the developed world like never before. Lots of hot (and laundered) money is dumped into the market
which creates a huge bubble. For now this bubble keeps inflating, like the US stock market. Eventually it has to burst because nobody other than
a relatively small number of millionaires can afford the house prices.

The key factors are:

1) Low interest rates and revised bank policy to allow people to take out mortgages well beyond what they can pay off.

2) The control of the prices by marginal sales. So if one house sells for 50% more, then the whole "market" jumps there.
The market does not care that such Jonny Rich don't account for enough customers to sell all the real estate on the market.
Due to (1) the other buyers bend over and get the new prices shove in long and hard.

Without cheap, oversized mortgages the bubble would be much smaller.

The real estate price explosion also shows that western fiat currencies are losing value fast. You can see this in the food prices.
This drives a type of investor panic as they seek to find somewhere to park the decaying fiat before it evapourates.