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Housing and Property Markets in Russia in 2017 and Resultant Struggles - a Short Review

The general economic and political situation in Russia has made its impact upon the Russian housing and property markets, and hence, on all the others factors, including the ongoing struggle and forced evictions.

Last year saw in Russia a new phenomenon – the so called ‘’renovation’’ in Moscow and Saint Petersburg. Under this project, the old five storey apartment houses, constructed in the late 1950-early 1960 ies and considered untenable, are liable to be demolished and new residential houses are to be constructed, with the residents of the old houses to be evacuated into new apartments.

This project triggered protests and set many residents of those old houses at loggerheads with other residents in Moscow and elsewhere. ‘’Heated’’ debates began. The opponents of the renovation plans turned to be quite active, at least in the beginning - they staged a meeting on May, 14th , on Sakharov prospect. According to them, the plans developed by the Moscow authorities violate the right to private property. The number of participants involved in the protest action was estimated at about 20 000 people. The activists were staging regular pickets at the State Duma (Russian Parliament), appealed to courts and Prosecutor’s Office.

The outcome of the struggle- the law on renovation was passed, evacuation of residents in some apartment houses was scheduled for February, 2018, and the residents’ struggle died down.

The right to housing was bitterly fought for by the so called cheated investors. On July, 25th , they staged an all-Russian protest action. In March of 2017, the Russian Ministry for Construction had claimed that about 40 000 Russians were expecting new housing in 714 houses and apartments paid by them under shared investors’ schemes.  The Russian investors’ movement estimates the number of those cheated much higher, at 150 000 people. Some participants of the investors’ movement had been waiting for the completion of construction of their housing for decades. By the end of 2017, the situation had not changed much, and the investors’ struggle is going on, taking various forms.

Still unresolved is the issue of the so called currency borrowers, whose mortgage debts after the Ruble devaluation at the end of 2014 went up by a high ratio. The borrowers failed to focus attention of the Russian authorities to their problem in holding by a number of meetings. Last year saw hunger strikes in the offices of those banks where they had borrowed money and in the governmental offices that had failed to support them.

In February of 2017, a hunger strike was staged in the House of Government in Moscow. The participants demanded that a meeting be held with the Ministry for Finances and Chairperson of the Central Bank. They didn’t turn up at the action place, having been ‘’deputized’’ by the Deputy Ministry of Construction and Director of the Housing Mortgage Lending Agency.

On March, 10th, Mr. Anatoly Siluanov, the Russian Ministry for Finances, condescended and had a meeting with the hunger strikers. Following the results, he instructed that additional proposals be submitted on completion of the current system of financial support provided to those who borrow from banks in foreign currencies, the US Dollars and Euros. The support is to be rendered to the currency borrowers directly, as it was clarified in the agency.

Some people saw a glimmer of hope, at least weak.

However, watching the situation evolve around the currency borrowers, some experts and investors admit that no one is seriously interested in having the issue resolved, no one except the heavily indebted investors.

They have to bear the main burden of their plight.



Protests in Russia federation on 2017: h ousing, corruption and stink

The 2017 was remembered by the most massive street protests since the speeches for fair elections in 2011-2012. And the number of detainees, for example, on the anti-corruption action in Moscow on March 26 exceeded the same number during the dispersal on Bolotnaya Square on May 6, 2012. But they held rallies in Russia not only against palaces and houses for ducks.

Renovation in Moscow: causes, consequences, alternative scenarios

The program of replacing almost all five-story buildings in Moscow with new buildings claims to be the largest town-planning project in post-Soviet Russia. In the coming years, the capital plans to demolish houses with a total area of ​​25 million square meters, which are home to 1.6 million people. The Russian Agency for Legal and Judicial Information (RAPSI) conducted a comprehensive investigation into the reasons for the appearance of this program, its pros and cons for ordinary residents, as well as possible alternative scenarios that solve the problem and minimize the negative effects.  We present this analysis for our readers.

Defrauded co-investors: "This is a disaster"

According to official data, in Russia there are 38 thousand deceived sharers. However, this statistic takes into account no more than a third of hapless property buyers. While there is a situation when in practice the number of victims of criminal schemes grows, despite the efforts of the authorities - since the beginning of the year the number of defrauded co-investors has already increased by 30 thousand people.

According to various estimates, the number of defrauded co-investors is several times higher than official statistics. So, in summer, when considering the draft law on the protection of the rights of co-investors, the leader of the Communist Party faction Gennady Zyuganov spoke of 150 thousand victims.

The Problem of Deceived Shareholders in St. Petersburg

Will the authorities still solve this problem?

The problem of defrauded co-investors will not be solved. Because to deceive and be deceived is the natural property of people, of human civilization. With the same success you can expect that you can completely solve the problem of defrauded car buyers, defrauded depositors or simply deceived buyers. But to reduce the number of people deceived by changing legislation and the necessary control can and should be done. Only once it is worth mentioning that I see a very big difference between what needs to be done to reduce the number of these co-investors and what is being done. And with these actions, we have not just a flaw, but great difficulties. I, as an expert, perfectly understand that the problem of defrauded co-investors is, it must be solved.

Who will help the foreign currency mortgage

Observing the development of the situation around foreign currency mortgage lenders, experts, and debtors themselves admit: nobody is interested in solving their problems, except for the victims of the mortgage, once issued in dollars and euros.

Solving the problem of currency mortgages - breaking news

Currency mortgage is a product offered by financial and credit organizations in the period of 2006-2008.

It was very popular due to the fact that for this service the interest rate was several times lower than the mortgage in rubles.

At the same time, banks gave money not only in dollars and euros, but also in other currencies: franc, yuan and others. At first, borrowers were satisfied with the choice: the currency is stable, the overpayment percentage is lower.

But in 2014, the sharp depreciation of the ruble began, foreign pairs just jumped up with a huge jerk. Even the banks themselves did not understand what was happening. That's where the problems of currency mortgages began.


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