Rental Housing as a Short-Term Strategy in Shifting Markets
In the current climate, renting a city apartment often comes out ahead of taking on a long-term mortgage or a consumer loan to purchase real estate. This perspective is shared by Alexey Lashko, who leads the Assistance Group of Companies and has discussed these ideas with major Russian news outlets.
For March 2023, Lashko argues that renting can be the smarter move given evolving financial conditions. He suggests that the gap between rental payments and the monthly mortgage obligation could be invested in a vehicle with a guaranteed return. Alternatively, placing funds with a reliable credit cooperative and earning interest could also be part of a prudent plan. Over ten years, this approach might enable purchasing an apartment using one’s own capital, without relying on aggressive financing. The broader message is to consider how one allocates money today to build future buying power rather than rushing into a debt-heavy purchase.
According to Lashko, the strategy labeled best option from worst is real estate mortgage credit. He views consumer loans for property acquisition as a less favorable choice for everyday households, noting that penalties on consumer loans can be harsher than those tied to traditional home loans. The comparison shifts the focus toward the overall cost of financing aside from the purchase price, highlighting how repayment terms and penalties influence long-term affordability. In his assessment, even when a mortgage is unavoidable, the rate on a conventional home loan is typically lower and the potential overpayment during periods of difficulty is reduced, making it a safer, more predictable path for most borrowers.
Market data from the mid-year period shows a softer momentum in new mortgage issuances within the domestic financial system. While activity did not reach the peak levels seen at the end of the previous year, lending standards for prospective borrowers remained relatively moderate as the winter season concluded. These trends suggest that lending institutions were balancing demand with risk controls, maintaining accessible credit options for qualified buyers while encouraging careful debt management. For readers weighing their housing finance options, this environment underscores the value of comparing rental costs, mortgage terms, and other credit instruments before committing to a real estate purchase. (Source: TASS)