Housing costs to increase further

Experts maintain the housing prices have peaked, because the boom cannot last long.

“The pace of housing prices growth has slowed down in Minsk and in Belarus in general. The prices were rising fast in 2005. This continued until approximately April 2006. But, the trend has remained, with the prices still on the rise.

Let’s take a standard one-bedroom apartment of 33 sq. m in a 9-storey building. 1 sq. m in such an apartment currently costs approximately $1500. It means the whole apartment cost will amount to around $50,000,” Mikalai Prastalupau, the chairman of the Belarusian Association “Neruhomasc” (Real Estate), told the European Radio for Belarus.

BACKGROUND

In 1999, the cost of apartments started to decrease, falling down to $280-300/sq.m. in August 2001. A standard one-bedroom apartment then cost around $10,000. But, since September 2001 prices went up. In 2002 they rocketed at 20 percent up. In 2003, they added another 30 percent up. Later, the costs soared 38 percent up, making the price of a standard one-bedroom apartment around $34,000.

When hearing these figures, people get confused. Are these costs normal? If the price-boom is over and the prices have stabilized, how can we dream about our own apartment? Lucky were those who started building in 1999-2000, when the prices “stalled”.

Siarhej: "I started building without taking a bank loan. I borrowed some money; my parents were helping, too. Thus, I managed to build a one-bedroom apartment within three years. It was then worth $16,000. Later when I started renovating my flat, I realized that it was too small for me. I sold it with a profit. I added some money and bought a two-bedroom apartment. I was lucky, because my contract stipulated that the cost of 1 sq. m. was not to change until the building was finished".

The housing problem can be solved in a normal way, when the average monthly wage is approximately equal to the cost of 1 sq. m. In Minsk, the average price of 1 sq. m. is $1500, while average monthly wages do not go beyond $300. Experts explain that the number of flats on offer is decreasing. Are there hopes for the better? Listen to the forecast from Mikalai Prastalupau.

Mikalai Prastalupau: "There is no room for optimism. If the offer continues to decrease, the costs will grow. There will still be a group of population ready to pay $1500 or even $2000/sq.m. The housing problem cannot be solved overnight. More housing projects need to be developed".

Today, in January, the number of flats offered for sale is as twice as less than last summer. The demand, on the contrary, is steadily growing. A similar trend has been observed in all the countries that lack the housing resources. In the neighboring Russia, the housing resources have remained frozen and have not been developed for twenty years, while the wages and wellbeing of citizens have increased.

Housing costs in the neighboring countries

$70 000 for a standard ‘khruschovka’ and $130-140,000 for a one-bedroom flat in a multi-storey building in Moscow. You will pay the same money for an apartment in Paris or London. With the same money, you can easily buy a two-bedroom apartment in Prague or a two-bedroom or even a tree-bedroom apartment in Warsaw. $70,000 for a one-bedroom apartment in Kiev. Around $65,000 – in Vilnius. $40-60,000 – in Berlin.