State Price Regulation At The Residential Real Estate Market In Russian Federation

In Russia,as in many countries,real estate market development takes place with the participation of the state.In fact,the formation of the real estate market,as it is understood in the west,began in the early 90 s,a period that was characterized by a general decline in industrial productivity,general reduction in the efficiency of the economy,the inefficiency of the financial and credit systems,falling disposable incomes and increasing social segregation of the population and the expansion of the shadow economy in the housing sector.Driven by these conditions,the importance of the state's role in this market grew.Currently,pricing for residential real estate market is influenced by the market mechanisms that do not guarantee high efficiency of economic activity.Despite the development of a number of bills,government price regulation of residential real estate market is still inefficient.This is confirmed by the trend of constant rising cost of housing in most major cities in Russia,underdevelopment of mortgage lending and low levels of housing development.Despite the stabilization following the global financial crisis,housing prices remain high with respect to the general populace income-making this asset inaccessible to most citizens.Historically,housing demand had exceeded housing supply,resulting in a significant shortage of available housing.Over time this trend resulted in a socioeconomic problem which requires resolution as matter of urgency.In the modern period of housing market growth,consumer and investment demand,this lack of balance leads to a steady rise in prices.Growth in property pricing has outpaced the personal income growth.The low volume of housing construction,characterized by a good qualityaffordability ratio,further exacerbates the problem currently making it necessary to study and understand the market trends.Such analysis would potentially enable identification of the supply and demand trends,provide an assessment of the impact of various factors on the price composition and highlight potentially effective tools available to the state in the price point regulation of the residential real estate market.Finally,this would aid in achievement of an optimized relationship between the freedom of economic activity and the balance of public and private interests.Considering the socio-economic importance of the housing market effect on healthy economic development and improvement of living standards,regulation efficiency of residential real estate pricing is one of the main challenges facing the Russian government.These circumstances highlight the relevance of the current research topic,as well as its significance in terms of theoretical and practical applicability.This dissertation consists of an introduction,conclusion,bibliography,and 3 main chapters.The first chapter presents the place and role of the real estate market in the economy,stages of market development of the residential real estate in Russia,highlighting the main economic characteristics of each stage.Due to the idiosyncrasies of the Russian residential real estate market(regional and local markets differ significantly),the main price-determining factors were divided into three groups with a hierarchical subdivision.The second chapter highlights the fact that the interchangeable use of the concepts of "price" and "value" is incorrect.Correlative regression modeling was employed to analyze the influence of key factors of supply and demand on the price of 1 square meter of housing in the primary Russian market within the time period spanning 2000 to 2014.This facilitated the identification of the general residential real estate market pricing trends and dynamics.In addition,there has been a further impact study with regard to the construction cost effects on the price of real estate in the federal cities-Moscow and St.Petersburg,and in regions of the Russian Federation based on the Federal State Statistics Service data of the average housing price data in the primary market and the cost of construction in the Russian Federation since 2000 to 2014.The third chapter analyzes the world experience in price regulation of residential real estate market and retrospective analysis of the government's housing policy in Russia,as well as the analyses of the dynamics of housing construction.These analyses studied the effects of pricing for residential real estate in Russia in general and in federal districts identifying the causes of price increase as a function of the sectoral structure of the regional's economy,the level of investments,incomes and volumes of housing construction.The author has analyzed the dynamics of housing affordability ratio with the credit in the federal districts of the Russian Federation on the basis of the conversion formulas for calculating the housing affordability index with a mortgage loan on the UN Habitat program.The author makes several proposals for improving the state regulation of pricing in the property market and suggests a model of public-private partnership in economy class housing and rented property.These proposals describe the benefits of the project for both the investor and the municipality.Further,the efficiency of mortgage lending as the main element of solving the housing problem is analyzed and discussed.Social policy of any country becomes more successful and promising when it has its own priority national projects.One such national project-"Affordable and Comfortable Housing to Russian Citizens",was initiated in Russia in 2006.It proposed to change the current situation and create conditions under which people will be provided with affordable and comfortable housing.Nearly two-thirds of Russian citizens want to improve their housing conditions.For many families,a mortgage-is an elusive goal,and independently buying an apartment without credit sources-the "dream of a lifetime." Low volumes of housing construction and high demand make the housing too expensive,this is further exacerbated by an underdeveloped mortgage lending system.This article explores the progress of the project implementation,its strong and weak points,analyzing its main problems in the context of a modern social policy of the Russian Federation.Scientific novelty of the current research is to develop and validate a package of measures aimed at improving the efficiency of state regulation of the residential real estate market.The most significant research results containing scientific novelty are detailed bellow:(1)The research has identified and systematized the factors influencing the level and dynamics of prices for residential real estate;developed a correlation-regression model of influence factors on the price of 1 square meter of housing in the primary market in Russia;(2)Based on comparative analysis of regulation of prices for residential real estate in Russia and worldwide,offered organizational and economic measures to improve state regulation of real estate market pricing,which are based on the model of interaction between public authorities and the private sector through public-private partnerships;(3)Developed measures designed to improve the taxation system,mortgage lending and pensions in the framework of state regulation of the residential real estate market.The methodology used in the current research,includes the analysis of the existing body of knowledge available in the libraries and online resources,the analysis of the statistical data from the official Russian,foreign and international sources,the modelmaking and the scenario analysis.This paper details several models,complex usage of these models allows for more scientifically grounded and effective managerial decision making.The analytical tools used in this research are widely available Microsoft software packages such as MS Excel,Project Expert,etc.as well as economical-mathematical models.This paper undoubtedly does not claim to be exhaustive for the fields mentioned in the title.Each one of them is extensive,deep,and changeable with vague limits often making it difficult to determine where one field ends and the other one begins.The paper represents only one of the points of view on the economic entities' development problems,and there has been made an attempt of analysis of the condition,contents and features of the essences of these fields.