Housing leasing would increase demand for housing, but would not solve problems in construction

Decree No 109 of April 6^th, 2017, amended housing leasing rules for citizens. Inter alia, novelties include revised utility rates for leased apartment, and a ban on increasing the cost of rent if leased apartment’s market value goes up. The amendments are likely to boost the demand for leasing apartments. As the discount rate reduces, leasing schemes would become more affordable for citizens and amid excess liquidity, more banks are likely to offer leasing schemes. In addition, developers could create own leasing companies to sell the constructed housing. In 2016, more than 50 apartments were sold using leasing schemes hence even a multiple increase in sales is unlikely to have a significant impact on the real estate market. Housing sales will step up only if prices on the real estate market continue to fall or household incomes increase.