| Apartment developments in suburban |
Russia's re-emerging middle class is driving strong growth in the country's embryonic mortgage market as pent-up housing demand and limited supply have caused property prices to soar 30% in Moscow and St Petersburg in the past year.
It's a significant development indicating that Russians are finally losing their aversion to long-term financial commitments and reflects a growing popular belief that today's economic growth is more stable than in the past.
Mortgage lending in Russia is still in its infancy and is currently estimated at less than $100 million but it's a market that is set to expand rapidly.
"Based on the number of real-estate transactions that occur every year in Moscow and St Petersburg and the buying power of the middle class, we think it's potentially about an $80 billion market," says James Cook, chairman of Delta Credit, Russia's leading mortgage lender.
Delta is Russia's first dedicated mortgage bank, established in 1998 and backed by third-party investors such as the European Bank for Reconstruction & Development and the International Finance Corporation.