This article conducts the comparative analysis of price fluctuations at national and local markets of the Murmansk region. We identify the main price trends at the local housing market in towns of the Murmansk region. We assess the impact of economic factors and the demographics on the price level at local markets of the Murmansk region. We assess the impact of household expectations on the creation of price bubbles at the local market. The study shows that the local factors largely affect the local housing markets. It could lead to local price bubble. Under the certain conditions these factors may both increase the macro-economic factors and neutralize them.
Highlights:
- \\\"General economic\\\" factors can explain only a part of housing prices changes in the regions and cities
- Relation between the housing market and the economic situation is weak in the Murmansk region.
- The high mortality rate, which is the main cause of a decline, does not mean the automatic property release and the rise of demand at market.
- Mortgage lending has become more popular among the population since 2006
- Realtor agencies act sometimes as investors and are interested in price increase
- The so-called catch-up growth of prices may be counted as a possible reason for bringing the cost of housing to the average rate. The situation is beneficial both for realtors and sellers of apartments
- Changes in the nominal and real salary has a positive effect on the price increase, at the same time, the housing price hikes are not explained by an income growth
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