Last year, the prices of real estate in Moscow fell by almost a third. What to expect in 2016?
“All my personal property I put up for sale, says the owner of a small brokerage company that operates in this market. — If you sell in a year buy half the price”. Its employees every day he says that all will be well.
About the same behavior of the other participants in the real estate market. “High probability that the dynamics of the dollar in 2016 in General will repeat last year’s sharp rise earlier in the year, the decline in the spring months, stabilizing at low levels in the summer, and then autumn again a dynamic growth — presented in a press release, the words of the managing partner of Savills in Russia Dmitry Halina. So, spend a dollar savings on luxury real estate is most profitable either now or in the autumn”.
Whether you want to spend a dollar savings? What is actually happening on the Moscow real estate market and what to expect?
Square meter fell in dollars by almost 30%
If you count in comparison with peak year 2013, prices fell by half. Such data results in analytical center irn.ru. We are talking about Moscow’s secondary market; if you count in rubles, the reduction will be less dramatic 14%.
In the segment of new buildings from January to January of the price practically have not changed, however, during the year showed sharp jumps. In January 2015 the average price of Moscow new buildings, according to “Metrium Groups”, was 147 000 rubles per sq. m. By July it jumped to 9%, to 160 000.
At the expense of what? In March pravitelstvennaya a solution to keep the mortgage rate at no higher than 12%. For this purpose, according to the construction Ministry, the Federal budget was reserved to 9 billion rubles, allocated to banks to refund the difference between the actual and desired rates. It worked: in April there has been a revival of the market, redressement of construction of Russia Mikhail Men. However, after a summer of falling oil prices and the growth of the dollar cost of a meter fell again and now stands at 148 000.
The volume offers a record with pre-crisis times
According to “Metrium Groups”, the number for sale, affordable apartments in new buildings for the year increased by 80%, they sold 14 000. In the segment of business class, the increase amounted to 43% (12,000 apartments). This means that developers put on the market more than ever since 2009, with nearly half of them — an expensive business class. The market is overstocked.
What about the demand?
According to Mariya Litinetskaya, managing partner of “Metrium Groups”, the buyer is no longer interested in new buildings in New Moscow, because maybe for the same money to buy an apartment within the ring road. According to Litinetskaya, during the year, the demand in New Moscow fell by 38%, and in the “old” — increased by 63%. In the first three quarters, the number of the registered contracts equity (DDU) in New Moscow amounted to 7200, and in Moscow — 6700. For comparison, in 2014 the figures were 11 700 and 4100.
Discounts — 20%
According to “MIEL”, by the end of 2015 90% of Moscow apartments were sold with a significant discount from the stated price — on average it amounted to 7-9%. According to the Chairman of the Board “MIEL” Olga Vranovo, owners of old housing stock provide discounts to even 15-20%.
Developers invented their own ways to revive consumer demand. “By law, only a Bank can issue a mortgage and generally engage in lending, so we have to invent all sorts of programs, called their loans and credit in the framework of different stocks, which are in fact counterparts of a mortgage with a lower interest rate”, — says the representative of one of the largest development companies of the Moscow region.
Developers of expensive housing to build cheap
Developers, historically engaged in the building of business class and elite real estate are already starting to look the projects in the segment of the economy. “In 2016 the demand will be formed around objects of economy”, — said Julian Gutman, Director of the Department of new buildings “INKOM-real Estate”.
Last year Leonid Kazinets of Barkli, said that will change the strategy. “Barkley”, well-known club houses on Ostozhenka, will build economy-class housing in the suburbs. Kazinets has announced the launch of six new projects with a total area more than 600 000 sq m, and only one of them will be elite, the rest of the economy projects beyond the MKAD.
Capital Group, built in Moscow several dozen residential complexes business class, also announced the launch of the project of mass construction of nearly 700 000 sq m of housing in Mitino. “We understand that today the most promising sector is the economy,” explains Forbes, the official representative of the company.
What to expect from 2016?
Forbes interviewed experts agree that property prices will continue to decline, but the exact number refused, citing economic and political uncertainty. “Forecasting is difficult now, because too many unknowns, from currency to the question of the extension of the state program of subsidizing mortgage rates”, — says Anna Sokolova, Director of Department of consulting and project management “Metrium Groups”.
According to her, in case if the program is not renewed, the demand for new construction will shrink by 20-30% and the prices by 10-15%. “The average offer price in rubles will be adjusted at the expense of those objects, for which the price now is still too high, — says Oksana Vranova of the group of companies “MIEL”. — By the end of 2016, we can expect a slight decline of ruble prices in the range of 5-10%”.
The group of companies “LSR”, one of the largest developers of housing segment in the market of Moscow and St. Petersburg, this year will offer for sale 900 000 sq m of housing in Moscow, St Petersburg and Ekaterinburg, of which about 200 000 sq. m housing business class. The company expects sales growth in 2016 by 13% compared with last year, LSR expects to sell 700 000 sq. m. “even If the state program is not renewed, will other measures to support the market”, — said the commercial Director of group of companies “LSR” Yuri Ilyin.
“The buyer activity can spur pent-up demand which was formed in the time of trouble in 2015”, — said the Director of the secondary market “ICOM Realty” Sergey Shloma. However, the growth of competition will force developers in Moscow to gradually reduce prices.
According to the Minister of construction of Russia Mikhail men, the question of the extension of the programme, the government will be back in February or March. Opponent of extending the program — the Ministry of Finance. A few days ago the Deputy Minister of Finance Alexey Moiseev stated that subsidizing mortgage rates will be no more, but there are other options to support the market.
In the segment of business class, the scope of supply is comparable with the mass segment. “Business class for survival will have to adjust pricing policy”, — said Julian Gutman from “INKOM-real Estate”. “This will be a difficult year for the real estate market”, — sums up Oksana Vranova of “MIEL”.
