My home is my castle

Property investment has long been known as a valid alternative to bank saving but there are other ways to safely ‘store’ your money
By Sergey Andreev

Demand determines profitability
Buying property is beyond the reach of many, and requires the investor to ‘lock in’ their money for some period of time — usually at least five years due to outlay on documentation (and the peculiarities of Belarusian legislation). In early January, analytical centre Realt.by noted that the average price per square metre for existing apartments in the Belarusian capital stood at $1,299; by the end of November, this had grown to $1,351, and looks set to rise steadily. New homes are enjoying a similar trend, with each average square metre having reached $1,220 (compared to $1,166 in January).

Experts believe other means are more profitable in terms of capital growth. Financial adviser Vladimir Savenok, who heads Personal Capital, tells us, “I’m quite suspicious of the current market, since construction rates are high countrywide; I think that property prices are likely to drop dramatically.” Vladimir Tarasov agrees, saying, “People rarely have enough money to buy homes outright and banking mortgages are few and far between, so prices should soon fall, along with falling demand.”

All that glitters
Belarusians tend to view gold and other precious metals as profitable investments but, according to experts, few invest in them, seeing them more as souvenirs or gifts. In any case, the investment potential of the ‘gold reserve’ is modest. Mr. Tarasov explains, “I believe that precious metals have exhausted themselves. After a sharp growth in prices over recent years, the market is stabilising and may even see prices fall. Of course, if the exchange rate against the American Dollar or European Euro falls, things may change but this looks unlikely in the near future.”

That one promises to leave
The National Bank has long understood that alternative investment avenues exist and is keen to expand its services to attract citizens’ savings. The Council of Ministers and the Presidential Administration are now approving an interesting draft decree, aiming to open up financial markets and appoint new regulators. In particular, in the short term, leasing, forfaiting and forex services may appear, as well as microfinance institutions — including credit unions. The Ministry of Finance is to focus on pensions and other insurance policies, as well as securities.

To date, the National Bank has enjoyed a monopoly of about 95 percent of public funds, due to a lack of alternatives; securities, pensions and precious metals comprise just 5 percent of savings. Its desire to nurture undeveloped financial markets is a broad hint to commercial banks that the days of unconditional customer loyalty are over; like other institutions, it will be fighting for investors’ money. 
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