Homeownership in Belarus: an unaffordable dream

On 3 October, at a meeting to discuss the drafting of a new housing code, Belarusian President Alexander Lukashenka said that helping citizens to improve their housing conditions will remain a key priority.

However, while the state has achieved some success in helping the most vulnerable groups, the majority of the population cannot afford an apartment or have to queue for social housing for decades.

High interest rates for loans, the absence of mortgage schemes and low salaries make homeownership an unattainable dream for many young Belarusians.

Meanwhile, receiving public housing in rural areas may be easy (and even free), but few people agree to do so, because there is a trade-off. It requires working for a state-dominated agricultural industry that many Belarusians consider backward.


The decay of Lukashenka’s social housing era

State aid to acquire private homes has long been a major electoral slogan for president Lukashenka. The state, indeed, built a large amount of housing and kept prices below market levels for low income earners for the past decade. Jungles of social apartment blocks, in areas like Kamiennaja Horka, have become a cultural meme among the Minsk population.

However, after the financial crisis of 2011, the construction boom and accompanying social housing programmes are beginning to trail off. Since 2007, the annual output of new housing space averaged about 5 million square metres. In 2017, the total area of new housing will be only half that.

Exchange rates are also having an effect. The value of the Belarusian rouble to the dollar has fallen seven times since 2011. This has undermined Belarusians’ ability to buy housing. The rate of the average Minsk salary to a square metre of housing in the city centre is now 1:4. For comparison, in Warsaw, Prague and Berlin, the difference averages about 1:2 or 1:3.

International financial institutions also demand that the state reduces its subsidisation of the housing sector as a pre-condition for loan talks. The government has chosen to relent to these demands.


Help for vulnerable groups, but not others

The state indeed achieved a certain amount of success in providing housing to Belarus’s most vulnerable citizens. Large families (defined as having three or more children) and orphans can get a home loan at the lowest possible interest rate of 1 per cent. Inhabitants of rural areas and towns with populations below 20,000 enjoy a 3 per cent loan interest rate. A 5 per cent rate is applied to a wide range of groups, including military servicemen, young families with two children, victims of the Chernobyl disaster, families with disabled children, war veterans, and others.

In July 2017, the government introduced a new financial instrument to support vulnerable social groups—targeted subsidies for home purchasing. The subsidy covers either part or the majority of a loan that a family takes from a bank. Taking into account the rate of annual inflation of 10 per cent, the policies for vulnerable groups offer real and generous help from the state.

For the rest of population, however, banks offer only commercial interest rates of 14-15 per cent and for a maximum 12 years. Mortgage mechanisms are still unavailable in Belarus, and an average citizen cannot take a loan for 20-40 years. Meanwhile, mortgage interest rates in EU countries do not usually exceed 2-3 per cent and a buyer can take a loan lasting 40 years.



Citizens that can be classified as “needing an improvement of their home conditions” can also enjoy a discount, which can as much as halve the market price. However, the queue for getting this discount has become legendary. In Minsk, the people who joined the queue in 1989 are only now receiving discounts on apartments. In regional centres, the situation is better, but people still have to wait many years.

Thus, the government has so far failed to provide affordable housing to the majority of the population, focusing only on those most in need. Owning a flat remains an unattainable dream for most young people, especially those living in the capital.


Overcrowded Minsk

Due to the rapid growth of construction in the recent decade, almost no free land for housing remains in Minsk. The queue for social housing stands at 208,000 families. President Lukashenka has repeatedly demanded the slowdown residential construction in Minsk. The president instead advocates the development of satellite towns nearby the city.

However, developers see this option as unprofitable. Satellite towns require large investments to build utilities, while the demand for apartments in these areas is not guaranteed. No wonder—few people would agree to move 20 km away to the towns, which often feature poor facilities.



Therefore, construction in Minsk continues mainly through the demolition of old individual houses and industrial plants. This policy has repeatedly sparked social tensions and protests. Citizens leave their inherited private houses and old areas very unwillingly. Sometimes the protests can turn into vast social campaigns, as was in the case of Asmaloŭka area.

The lack of kindergartens also remains a crucial problem for Minsk. The capital remains a hub for the migration of young people from all over the republic. Minsk has the largest population of children in the counrty. In some districts, the kindergartens are overloaded by 60 per cent.

The authorities created special daily bus tours for transporting children and their parents from the overloaded districts, but parents complain that this takes a lot of their time. Encouraging private kindergartens or other forms of childcare, as well as raising fees for parents and salaries of the staff could definitely improve the situation. But the authorities do not dare to give in to one of the last features of the decaying “socially oriented state.”


Rural Belarus – chance for a Renaissance?

In the early 2000s the government invented a new approach to resurrecting Belarus’s deserted rural regions. Planners launched the 2005-2010 State Programme for Rural Revival and Development. The programme set out the concept of agro-towns. These are rural settlements with a high level of industrial and social infrastructure and amenities. Areas tagged for agro-town developments were to feature communal utilities, roads, housing, communication and transport, education and medical care facilities.



The programme was aimed at attracting young specialists with families. It granted free housing to those who agreed to be employed at unpopular agricultural collective farms. As a result, 1500 agro-towns sprouted up in Belarus.

Nevertheless, the rural population continues to fall. Rural communities now account for 22.1 per cent of Belarus’s population. While the idea of agro-towns appeared attractive at first, it did not resolve the main problem for rural areas—economic unattractiveness, stemming from the state’s monopoly over farming and Soviet-style management techniques.

The government is now trying to create additional incentives for moving to the rural areas. A new, “revolutionary” law on business liberalisation may come into effect in the coming months. However, as long as the state remains the dominant owner of the agricultural industry, the people are unlikely to return to the land. No infrastructure or housing projects will bear fruit unless people can feel themselves owners of their farms and freely sell their production.