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Regional Economics: Theory and Practice
 

Housing demand in the local housing markets of the major cities of Russia

Vol. 12, Iss. 39, OCTOBER 2014

Available online: 14 October 2014

Subject Heading: Economy and management

JEL Classification: 

Pages: 13-27

Nafikova S.D. Bashkir Academy of Public Administration and Management under President of Republic of Bashkortostan, Ufa, Republic of Bashkortostan, Russian Federation
svetlana.b@list.ru

Importance The article analyzes the main factors of the housing demand in the large cities of the Russian Federation.
     Objectives On the basis of the National Population Census, held in 2002 and 2010, and municipal statistics, the author evaluates the housing conditions of the urban population and their housing demand, population dynamics and solvency of the population and analyses their impact on the supply and demand in the local housing markets.
     Methods Based on the comparative analysis, the paper identifies the cities with potentially high and low demand for housing. The author demonstrates that in all large Russian cities, regardless of the level of their development, housing conditions are extremely unfavorable, that determines an acute housing demand. The paper examines the indicators of housing construction, its adequateness to the demand and the dynamics of the inhabitants' housing conditions on the functioning local markets and defines the specifics of the housing markets development in highly developed and less developed cities of Russia. The author arrives at a conclusion that in the highly developed cities with a high rate of population increase, the availability of the effective demand activates the housing construction rate, but that construction is directed to meet the consumer and investment demands of the high-income groups of the population, which leads to the overproduction of the elite housing and deficiency of an economy class residential property market segment, that in its turn, determines the price surge and reduces the availability of affordable housing.
     Results The paper identifies the signs of the considerable deepening of the differentiation of housing conditions of the population, and also a high proportion of investment and vacant housing. In the less developed depopulated cities, the construction of new residential space is hampered by the lack of the effective demand, which determines a high degree of housing stock depreciation and the poor quality of living conditions.
     Conclusions and Relevance The author substantiates the necessity of a differentiated approach in housing policy in the cities with different levels of development, and demonstrates that all cities require the purposeful State policy to stimulate the construction.

Keywords: local housing market, housing needs, housing conditions, housing demand

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