Targeted housing subsidies will reduce state's expenses on housing construction in Belarus

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July 10, 2017 14:24

According to Decree 240, a new type of state support for citizens in need of improving housing conditions has appeared in Belarus, state targeted subsidies.

The difference from the previous system, which is likely to be scrapped in the future, is that it envisages assistance directly to citizens, without the banks. The subsidy size would depend on the type of the need and would be tied to the National Bank’s discount rate. Belarusians are likely to increase spending on housing construction and reduce financing of the construction industry. Support for large families will be reduced by increasing loan servicing costs, and loan terms for this group of citizens would be reduced from 40 to 20 years. Lending for housing construction at commercial rates would increase due to increased participation of banks in lending programmes.

As interest rates in the economy decrease, the state may abandon targeted housing subsidies altogether; the transition to market relations in construction would expand the circle of potential housing buyers through optimised prices and increased competition among developers.

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