Moscow housing prices may fall sharply. Moscow housing prices may fall sharply What will happen on the real estate market in

June 2019: Price dynamics in the secondary market remain highly segmented. The situation in a particular location is mainly determined by the structure of the sentence. The cheapest options left the market during the boom in demand last year. Sellers, fueled by talk of a sharp imitation of apartments after July 1, when changes to 214-FZ come into force, are trying to raise prices for what is left. But not very successfully, because the cost of budget housing had already increased significantly in previous months. As a result, the main demand flows into the middle segments, which are no longer much different in price from the cheap ones. The main outsider of the market is still the overpriced business class. At the same time, the elite segment in the Central Administrative District, in anticipation of the same reform 214-FZ, on the contrary, went up. Most likely, the “stripes” in the market will continue until the fall, when the first results of the shared-equity construction reform appear. Read more about real estate market trends in the articles and reviews of the analytical center website:

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Forecasts and reviews on housing market segments:
new buildings in Moscow and the Moscow region, countryside real estate

The decline in the purchasing power of Russians, caused primarily by a drop in real disposable income, has cooled the interests of compatriots in purchasing square meters. In this regard, the real estate market “sank” - the cost of both new buildings and secondary housing has dropped, some apartments are even sold at a 30-50% discount compared to the pre-crisis price level.

However, experts expect the Russian economy to recover next year. Thus, according to World Bank estimates, Russia's GDP will grow by 1.5%. The International Monetary Fund (IMF) predicts growth by 1.1%, and the Central Bank of Russia - less than 1% (assuming a barrel price of $40).

Will the economic growth of 2017 be a stimulus for the real estate market and is it possible to save savings by investing in a home purchase? AiF.ru asked this question to the experts.

Alena Afanasyeva, senior analyst at FOREX CLUB Group

Definitely, housing can become one of the most attractive and promising investments for the next two years. The fact is that by now prices have already reached their minimum levels due to a sharp drop in household incomes and the forced sale of already commissioned real estate by developers with a high debt load.

However, over the past two years, during which we have been experiencing a downturn in the housing market, too many companies have left the market, sharply reducing the volume of properties put into operation over a 1-2 year horizon. Meanwhile, the gradual stabilization of the situation in the Russian economy, as well as a further reduction in rates by the Bank of Russia, will stimulate public demand. It is possible that mortgage rates will reach 8%-10% by the middle of the year.

At the same time, prices will also be pushed up by inflation in the building materials market: rising prices for cement and wood can add 1-2% to the cost of housing.

In addition, changes in Russian legislation will make their contribution: now developers will be able to receive funds from equity holders only after the transfer of finished apartments. This means that they will be forced to take out loans, that is, they will not be able to use interest-free financing. In such conditions, additional interest costs will also be included in the cost of housing.

Pavel Sigal, first vice-president of Support of Russia

Investing money in housing and then renting out the apartment is now unprofitable. The fact is that there is an oversupply on the market, and the yield will be less than 7% per annum, and only if there are no external shocks and the oil price remains at current levels.

It is more profitable to invest money in bonds or put it on deposit, although deposits are not much more profitable than real estate. Of course, it is profitable to buy an apartment at the initial stage, but you need to understand that you will have to invest in repairs and wait 2-3 years for the house to be rented out, that is, all this time the money will not work. The golden time for investing in real estate, when it grew exponentially, has passed. Investments in real estate are therefore suitable for conservative investors who do not seek profitability.

Anna Bodrova, senior analyst at Alpari

The state of the housing market in 2017 will directly depend on the state of the Russian economy and the domestic banking system. The lion's share of new buildings is built using borrowed capital. Current rates are unaffordable for development due to the bank's high assessment of risks, and in order to compensate for these costs, an unnecessary financial burden falls on the final home buyer. Today's prices per square meter in large cities have begun to rise; this is a good time to purchase, since an increase in the cost of housing is not excluded in the first or second quarter of 2017.

Consumers are still suspicious of offers to purchase housing that has not yet been built or delivered, so the main demand is either for ready-made new buildings or for the secondary market. In the secondary housing segment, prices began to rise in mid-autumn 2016, but the rate of increase in the cost per square meter is still restrained. There is no rush either in offers or in prices: the housing sector looks quite stable and neutral.

Considering that the Central Bank of the Russian Federation is unlikely to lower the key rate before March-April 2017, one should not expect a reduction in rates on mortgage products in the first quarter. This means that a surge in demand for mortgages and, accordingly, interest in buying a home may occur in April-May next year. Naturally, subject to a rate reduction.

Real estate market analysts assessed how the cost of apartments in the primary and secondary markets of the Moscow region will change

The outgoing year in the real estate market of the Moscow region was marked by large discounts: realtors every now and then reported the share of discount transactions, and Rosreestr reported an abnormally large number of transactions - both in the secondary and primary markets.

To find out how the market will behave, RBC Real Estate asked analysts what they think about changes in housing prices in Moscow and the region in the new year, 2017.

— The most important trend in the secondary market of Moscow housing is a slow but sure decline in prices. In January, the median cost of 1 sq. m reached 185.9 thousand rubles. - and this became the maximum value for the entire year. At the end of November, this figure reached a minimum of 181.4 thousand rubles. Such a price slide remains unnoticeable for some real estate market players, especially for ordinary consumers, as it amounts to only 0.3-0.5% per month. As for the real reduction in sales prices (and not the cost of supply), over the year it is at least 10%, since in most cases transactions on the secondary housing market in Moscow take place at a discount: in January the share of sales at a discount was equal to 82%, in November - already 86%. Based on the results of the last months of 2016, the average purchase budget also decreased: from 8 million rubles. in August to 7.85 million rubles. In November.

We expect that in 2017, real estate prices in the secondary housing segment will remain at the same level as now, or will continue to decline by approximately 5-7% per year. We do not see any reasons for prices to rise in the near future. As for the notorious price bottom, which has been mentioned so often lately, then, according to our forecasts, the market will reach it only in 2018 or 2019.

— We expect that prices for new buildings in Moscow in 2017 will increase within the limits of inflation - that is, by no more than 6% per year. This is due to the fact that developers are trying to maintain their market share and maintain the pace of sales. An additional reason for the rise in prices for new housing can be the emergence of new infill development projects within the Third Transport Ring. The supply volumes in such houses are small, but the overall price level is, as a rule, higher than large projects on the site of industrial zones.

In New Moscow and the Moscow region, the price level for new buildings will remain virtually unchanged. The trend towards a decrease in the share of new projects on the foundation pit is also typical for these locations, but the increase in prices during the transition to the next stages of construction here is complicated by increased competition. It will be more important for developers to maintain targets for sales rates, perhaps to the detriment of meeting the model of price increases as construction readiness increases.

In the secondary market of Moscow and the region in 2017, one can expect a slow increase in prices - within 4-5% in annual terms. A significant volume of supply will not allow prices to rise above inflation, and in order to complete transactions, most sellers will have to reduce their stated price levels - however, the size of the discount will gradually decrease. Average prices in the Moscow region are now becoming increasingly difficult to analyze, since a significant part of the lots presented in the active supply are set at prices that are based on the current level of effective demand. The slight increase in the average price level, which has been observed recently, reflects an increase in the share of these lots, and not the natural behavior of the market. Also in the new year, the trend towards an increase in the share of mortgage transactions will continue.

One of the long-term trends driving demand in the housing market in recent years is the long demographic cycle. The generation born in the first half of the 1980s entered the age of greatest demand for transactions. Since their consumer habits were formed already in the post-Soviet era, the greater attractiveness of modern new buildings (compared to outdated Soviet housing) fits into this pattern.

In general, developers start with the secondary market and, as the past year shows, they are winning this competition due to more effective advertising campaigns, discount opportunities, and effective installment and mortgage programs. The practical expression of this trend is the flow of buyers from the secondary market to the primary market.

— Effective demand is very limited, since household incomes are not growing. The relative stability of demand is supported by lower prices and bargaining on the secondary market and an increase in the number of budget new buildings in Moscow, where you can now buy an apartment for 3-4 million rubles. Attempts to raise prices in response to the revival of demand fail: people cannot afford more expensive properties, so they would rather refuse the deal than pay more.

As a result, the downward trend in prices continues in the market. The depth of the drawdown depends on the volume of supply, which has grown significantly in recent years. In 2016 alone, the supply volume in Old Moscow increased by 2.8 million sq. m. m of housing. Many projects are still on paper, but may enter the market in the coming years. Demand cannot keep up with this growth in volumes, therefore, if developers do not slow down the pace of launching new projects, prices will continue to decline steadily by about 10% per year and over the next five years they may lose 30-40% in price.

— In 2017, the average cost of housing on the primary market will grow moderately within 8%. The weighted average price at the end of 2016 was 238.2 thousand rubles. for 1 sq. m (excluding elite supply), annual growth was 1.4%. The price dynamics of new buildings are influenced by two multidirectional factors - on the one hand, the increase in prices is facilitated by an increase in the construction readiness of projects, on the other hand, it is pulled down by the release of new projects at the initial stage with a lower cost. In 2016, growth factors prevailed, as large-scale integrated development projects that entered the market in 2015 increased in price.

For the secondary market, the forecast is quite pessimistic: the price decline, which was observed throughout 2016 and reached an average of 15% across the entire market, will continue. For an old “panel” older than the eighties, the price reduction can be 8%, for newer monolithic houses - 5%. Stabilization of prices without worsening the decline can be expected in certain narrow locations - for monolithic houses in a number of prestigious areas within the Third Transport Ring with limited supply in new buildings. Also, prices most likely will not fall for new panel houses, since this is a popular product on the secondary market due to its lower budget compared to a monolith and higher quality compared to old panel housing construction.

— Prices will rise the most in the Moscow region: we predict an increase in the cost of 1 sq. m. m for new buildings in the Moscow region within 5% for six months. Positive dynamics will be facilitated by the systematic recovery of the macroeconomy and, consequently, an increase in the solvency of buyers. Private investors hoping to make a profit from the sale of real estate will return to the market. The second reason for the rise in price of new buildings near Moscow will be the reduction in the volume of construction in the region, which is associated with the urban planning policy strategy of “live, work and relax in one place.” The trend is confirmed by the reduction in the number of new residential projects: at the end of 11 months of 2016, there were 2.5 times fewer than a year earlier. The volume of supply of new buildings in the Moscow region will continue to decline further.

Stable demand for housing in the Moscow region will be facilitated by loyal pricing. Today the average cost of 1 sq. m in the region, even in the closest projects to the borders of Moscow, is almost two to three times lower than in a similar segment within the Moscow Ring Road, and 20% more affordable than in New Moscow.

As for Old Moscow, we predict a restoration of the traditionally high share of new buildings in the supply volume of business class and above, which will have a positive impact on the average cost of 1 sq. m. m. The trend of restoring the traditional structure of supply within the Moscow Ring Road intensified in the second half of 2016 and at the end of 11 months of 2016, the share of expensive projects (business class and above) within the old boundaries of Moscow increased by 7 percentage points - now it is 45% of the total volume of new buildings.

However, with a qualitative change in the structure of supply in Old Moscow, an increase in the average price of 1 sq. m. m will be restrained by the constant release of new projects. Nevertheless, the traditionally crisis phenomenon - the predominance of mass segment projects - will gradually leave the capital market. The current market conditions for new buildings in the Moscow region create expectations of a gradual recovery of the market and the beginning of a gradual rise in prices next year.

The dynamics of prices on the secondary housing market, as a rule, correlates with the dynamics of prices for new buildings with a time lag of three to six months. Thus, as the market for new buildings recovers, we should expect a revival in the secondary housing market and, consequently, an increase in prices.

— The capital’s secondary market will extend its stay in a protracted depression. There will remain pressure from new buildings that have fallen in price greatly, and there will also remain a large “overhang” of unsold old apartments. At the same time, we will not see any noticeable reduction in ruble prices - the market correction has long been driven by inflation. To launch a spiral of price increases, a stage of hyperinflation is required, which the current government cabinet is unlikely to dare to enter.

The primary market is in a slightly more favorable situation, however, here too the supply of apartments is increasing, which will prevent direct price increases. However, the price dynamics here will initially be due to the abandonment of the current level of discounts (8-15%). As a result, in 2017, developers will have to pass another survival test.

In short, the apartment market of 2017 will remain a buyer’s market, which will receive both a rich assortment and price flexibility from apartment owners. Only a hyperinflationary scenario can reverse this situation.

The real estate market is the segment of the economy that reacts especially sharply to crisis processes. The negative dynamics of oil prices, the instability of the ruble exchange rate, and the slowdown in economic growth are contributing to a fall in housing prices. What will happen to real estate prices in 2019: should investors invest their money in houses and apartments now or wait for better times? Authoritative experts give answers to this question.

What factors influence the Russian real estate market?

The Russian economy continues to operate in a crisis, and therefore the real estate market also remains in a very tense situation, due to:

• An active decline in demand, which is provoked by an increase in mortgage rates and the reluctance of citizens to make large purchases in an unstable macroeconomic situation;
• A decrease in construction volumes due to rising prices for materials and more difficult conditions for obtaining bank loans for developers.

It is worth paying special attention to factors that negatively affect the functioning of the Russian real estate market:

• Extension of sanctions by Western countries, which prevents domestic banks from accessing cheap external sources of capital and excludes the possibility of reducing interest rates on housing loans.
• A decrease in the real income of citizens, which does not allow them to make onerous mortgage payments.
• The fall in the ruble exchange rate, putting holders of foreign currency mortgages at an extremely disadvantageous position.
• Complicating conditions for obtaining housing loans, which is reflected in rising interest rates and tightening requirements for borrowers.

Considering the above circumstances, experts believe that 2019 and 2020 will be the most difficult years for the Russian real estate market. According to sociological surveys, even in the current 2019, every 10th Russian postponed the purchase of housing for several years, and every 6th decided to postpone this event for an indefinite future. Therefore, in 2019-2020. there will be a significant reduction in demand.

Recovery will only occur in 2019-2020. influenced by falling mortgage rates, the implementation of government support programs in the real estate sector and assistance from regional authorities.

What do the experts say?

The reduction in demand in the Russian real estate market in 2019 will provoke a further decline in prices of houses and apartments. This forecast is given by all experts without exception.

Professor of the Russian Economic University named after. G.V. Plekhanov, leading analyst of the Russian real estate market Gennady Sternik

In 2019, the likelihood of deepening stagnation in the market for residential and non-residential properties is extremely high. The market recovery will begin only in 2020. As a result, Russian realtors should prepare for an active reduction in the cost of objects. The situation will be complicated by the fact that developers will reduce the supply of real estate in response to falling prices. At the same time, next year can be considered the most favorable time for investment, which can definitely be sold at a higher price later.

President of the Russian Guild of Realtors (RGR) Tatyana Demenyuk

Real estate prices will fall even further in 2019. The minimum reduction will be 5-7%. However, it will be possible to judge how much the market price can realistically be reduced only at the end of the year. First of all, the fall will affect old housing (built in the 60-80s) on the outskirts, which has low liquidity.

President of the Ural Chamber of Real Estate Eduard Bogdanov

If 2016 was comfortable for buyers of real estate, since the market presented them with a significant number of options, giving them the opportunity to bargain and wait, then in 2019 the situation will be different: along with a significant decrease in value, there will be a reduction in supply by approximately 40%.

Executive Director of the Guild of Builders of the Urals

In new buildings in 2019, real estate prices will decline, which will lead to a “freezing” of the primary real estate market. Developers will not want to work at a loss and will therefore reduce supply.

Thus, the forecasts of most analysts predict a further decline in prices for the Russian real estate market in 2019. However, there are also opinions according to which the segment of purchase and sale of houses and apartments will begin to be rehabilitated in 2019 due to the gradual stabilization of the economy. This point of view is shared by the head of Sberbank German Gref. However, the exact picture of the cost, demand and supply of houses and apartments in Russia will only be clear at the end of this year.

What awaits the domestic real estate market and what factors will have a positive or, on the contrary, negative impact on it, says AiF.ru.

The decline in the purchasing power of Russians, caused primarily by a drop in real disposable income, has cooled the interests of compatriots in purchasing square meters. In this regard, the real estate market “sank” - the cost of both new buildings and secondary housing has dropped, some apartments are even sold at a 30-50% discount compared to the pre-crisis price level.

However, experts expect the Russian economy to recover next year. Thus, according to World Bank estimates, Russia's GDP will grow by 1.5%. The International Monetary Fund (IMF) predicts growth by 1.1%, and the Central Bank of Russia - less than 1% (assuming a barrel price of $40).

Will the economic growth of 2017 be a stimulus for the real estate market and is it possible to save savings by investing in a home purchase? AiF.ru asked this question to the experts.

Alena Afanasyeva, senior analyst at FOREX CLUB Group

Definitely, housing can become one of the most attractive and promising investments for the next two years. The fact is that by now prices have already reached their minimum levels due to a sharp drop in household incomes and the forced sale of already commissioned real estate by developers with a high debt load.

However, over the past two years, during which we have been experiencing a downturn in the housing market, too many companies have left the market, sharply reducing the volume of properties put into operation over a 1-2 year horizon. Meanwhile, the gradual stabilization of the situation in the Russian economy, as well as a further reduction in rates by the Bank of Russia, will stimulate public demand. It is possible that mortgage rates will reach 8%-10% by the middle of the year.

At the same time, prices will also be pushed up by inflation in the building materials market: rising prices for cement and wood can add 1-2% to the cost of housing.

In addition, changes in Russian legislation will make their contribution: now developers will be able to receive funds from equity holders only after the transfer of finished apartments. This means that they will be forced to take out loans, that is, they will not be able to use interest-free financing. In such conditions, additional interest costs will also be included in the cost of housing.

Pavel Sigal, first vice-president of Support of Russia

Investing money in housing and then renting out the apartment is now unprofitable. The fact is that there is an oversupply on the market, and the yield will be less than 7% per annum, and only if there are no external shocks and the oil price remains at current levels.

It is more profitable to invest money in bonds or put it on deposit, although deposits are not much more profitable than real estate. Of course, it is profitable to buy an apartment at the initial stage, but you need to understand that you will have to invest in repairs and wait 2-3 years for the house to be rented out, that is, all this time the money will not work. The golden time for investing in real estate, when it grew exponentially, has passed. Investments in real estate are therefore suitable for conservative investors who do not seek profitability.

Anna Bodrova, senior analyst at Alpari

The state of the housing market in 2017 will directly depend on the state of the Russian economy and the domestic banking system. The lion's share of new buildings is built using borrowed capital. Current rates are unaffordable for development due to the bank's high assessment of risks, and in order to compensate for these costs, an unnecessary financial burden falls on the final home buyer. Today's prices per square meter in large cities have begun to rise; this is a good time to purchase, since an increase in the cost of housing is not excluded in the first or second quarter of 2017.

Consumers are still suspicious of offers to purchase housing that has not yet been built or delivered, so the main demand is either for ready-made new buildings or for the secondary market. In the secondary housing segment, prices began to rise in mid-autumn 2016, but the rate of increase in the cost per square meter is still restrained. There is no rush either in offers or in prices: the housing sector looks quite stable and neutral.

Considering that the Central Bank of the Russian Federation is unlikely to lower the key rate before March-April 2017, one should not expect a reduction in rates on mortgage products in the first quarter. This means that a surge in demand for mortgages and, accordingly, interest in buying a home may occur in April-May next year. Naturally, subject to a rate reduction.