"They Call It A Paradox": What's Happening In The Minsk Real Estate Market

People are generally unable to accept the prices.

There is now a shortage of certain types of housing in Minsk—Khrushchev-era buildings and old prefab apartment blocks, that is, the cheapest segment. “But people aren’t flocking to ‘investment’ apartments in new buildings—that fresh concrete, whether finished or unfinished,” — notes real estate market expert Natalya Litovskaya.

“They call this situation a paradox: loans are cheap, incomes have risen, yet the number of transactions is the same as during the crisis years. There’s no other explanation for this paradox besides a ‘psychological’ one. Owners of inherited Khrushchev-era apartments have come to believe in their value and don’t want to sell unless absolutely necessary. People who want to improve their living conditions by selling their small, old apartment are unwilling to take out additional loans at these price levels.”

At the same time, potential buyers aren’t rushing to purchase square meters at these skyrocketing prices.

“Most people aren’t willing to accept that a two-room apartment in an old prefab building, with a worn-out renovation—which cost 60,000–70,000 just three years ago—is now being offered for 110,000. And that a “Euro-two-room” apartment, which cost someone 65,000–70,000 at the start of construction, is now selling for 120,000–125,000,” the expert adds.

In her opinion, “I don’t want to overpay” is the main argument of those who have put their search for or sale of their “extra” apartment on hold.

“And this seems to be a matter of principle. The argument that prices will start to fall if loans become more expensive, foreign-currency incomes will also decline, and it won’t be any easier to improve living conditions—doesn’t hold water,” says Natalya Litovskaya. — The situation with current price levels is perceived as abnormal by the average seller and buyer. And in the face of all these unpredictable circumstances, the most tried-and-true and safe course of action is to lie low and wait it out. “Preserving what has been earned through backbreaking labor.”

The expert refrains from predicting “how long sellers in the ‘lower’ segment will remain in a wait-and-see mode and what they will consider ‘normalization’ and a signal to re-enter the market.”

“I had expected even cheaper loans. But here they are, and there’s no sign of increased buyer activity. However, the widespread belief that ‘sell now, or prices will crash tomorrow’ might actually take hold. In recent days, disinformation campaigns have already begun on social media. But so far, they’re coming from sources that don’t influence the public’s collective consciousness. Influential figures aren’t engaging in such disinformation,” the expert concluded.

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