March 11 – March 17, 2013

Real Estate Market

The situation has not changed
Real Estate Market

Activity in the real estate market focuses primarily on the secondary market. In the regions the real estate market in terms of new housing construction is developing fairly slowly and we can say that the construction sector yet not entirely came out of the crisis.

One of the past year’s main trends was the increased number of transactions in the secondary real estate market, which is true for Minsk city and country as a whole. In 2012 the number of deals on the secondary real estate market has increased by 14-16% compared with the previous three years (2009-2011).

Simultaneously, the market for newly constructed real estate shrank along with the construction volumes. This is due to the policy of reduced opportunities for soft construction loans for new housing. The Prime Minister Myasnikovich’s initiative – to resume currency lending for housing construction – could change the situation. However, the National Bank did not support this proposal and proposed its own solution to revitalize the construction market. According to the new rules for housing construction loans, the needy to improve their living conditions can obtain “loans in Belarusian rubles at 16% pa” in OJSC Belarusbank. If housing construction takes place in the settlements populated by 20 thousand and fewer residents, the rate is reduced to 14%.

The secondary real estate market is the liveliest in Minsk. During the first two months of 2013 1866 deals have been concluded. In February 2009 through February 2013 the cost of the square meter on the secondary market increased by 50% – from USD 1000 to USD 1500.

Real estate agents in Minsk note the reduction in the number of apartments put up for sale, which is the main reason behind the price reaching the psychologically significant level – USD 1500 per sq.m. Note that only Minsk demonstrates such market activity.

Regarding the rest of the country, in January and February 2013, 4686 deals were signed off. Compared with 2012, the figure has increased, but not as much as in Minsk (only by 8%). Sales of apartments located in the Minsk region were a little more active.

Another recent trend in the Belarusian real estate market is the increased number of Russians buying real estate in Belarus for “soft emigration”. Russians find Minsk, Vitebsk and Grodno regions the most attractive.

Finally, there is a trend towards shrinking of the real estate lease market in the capital and regional centers – the demand is times greater than the supply, which results in higher costs for the long-term rent. In small towns the situation is exactly the opposite, for example, in the Brest region (Malaryta, Gantsevichi, Lyakhavichy, Rechitsa) furnished apartments (regardless of the bedrooms number) are often offered for long-term lease for free: tenants are asked to pay the utility costs only.

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Once a week, in coordination with a group of prominent Belarusian analysts, we provide analytical commentaries on the most topical and relevant issues, including the behind-the-scenes processes occurring in Belarus. These commentaries are available in Belarusian, Russian, and English.

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