Russia: Changing patterns of housing
One of the biggest, continuing changes in Russia has been the emergence of consumerism but, recent history also shapes the present.
With a population of more than 140 million, Russia has one of the highest rates of home ownership in the world, at just over 87 per cent, according to the global analyst trading economics. com. Three quarters of the population are in cities where almost all live in small apartments, frequently inherited and often with generations sharing the same rooms. But with US style consumerism taking hold attitudes to debts including mortgages are rapidly changing, along with aspirations.
"Behind encouraging GDP demand and retail trade numbers Russians have become increasingly hooked on credit," says the Moscow Times.
"Part of the rapid rise in debt has been the concurrent rise in mortgage borrowing, which is the fastest growing debt product in Russia."
After a dip in growth due to international sanctions, the volume of housing construction is set to grow to 4.1 billion sqm in 2023, almost a fifth more than in 2017, says the Agency for Housing Mortgage Lending. This includes plans to renovate tens of thousands of five-storey Krushchev-era blocks known as pyatietazhki. They were built so that multiple families would not be forced to share flats. Now they present younger Russians with the chance of a place of their own. An emerging middle class of around 25 million accounts for about 80 per cent of demand in the country and buying patterns are changing with a new generation of consumers. Russian millennials are essentially the country's first "proper" consumers says Arina Khodyreva, the director of technology and digital at PBN Hill+Knowlton Strategies, an arm of the global public relations company, Hill+Knowlton.
"While they never experienced the deprivations of the Soviet era themselves, Russian millennials are nevertheless influenced by an older generation that is very keen to consume after years of empty shelves," she says.
The average Russian now owes five months' wages in addition to any mortgage debt. Eight years ago the figure was closer to two months".
"Accustomed to economic uncertainty and volatility, many Russian millennials value short-term enjoyment, achievement and products over potential gains down the line," she adds.
"Why work half your life for something when you don't know what will happen tomorrow?"
"As in the rest of the world, millennials living in big cities are overwhelmed by their daily routines and stress at work, which disrupts work/life balance," she points out.
"Russian millennials have embraced the trends of healthy lifestyle and community building, and they have started looking for activities that will help them stay healthy and connect them with like-minded people but which don't require too much effort. One of the most apparent manifestations of this is the rise of running clubs in big cities, which have become an essential part of many millennials' sporting and social lives."
But, she also add, bear in mind that, "trust is a key element in any sharing economy; wary of past experience in Russia from the days of communism and the volatility of the 1990s, Russians are not fully willing to trust each other. This is holding back the development and spread of innovative sharing services. Individualism is still holding strong over the benefits of the sharing experience."