Alla Shinkevich, CEO of the Nevsky Prostor real estate agency, shared her opinion on what to expect from the new buildings market in Russia in the near future and why prices should not fall by 40%.
— Prices for new buildings began to rise several years ago, which was due to both an increase in the cost of construction and an increase in demand for housing. In recent years, we have seen a steady increase in prices by about 15% annually. This is due to an increase in the cost of building materials and services. However, like any market, the new building market is not without its own peculiarities and adjustments.
Simultaneously with the increase in prices for new buildings, there was an increase in construction volumes. Residential complexes grew like mushrooms after the rain, especially in large cities. However, the scale of construction was not always proportional to demand, which led to a temporary oversupply. Nevertheless, this did not cause a serious decline in prices.
In recent months, we have started to notice a slight decrease in prices for new buildings. This is not a sharp drop, but rather a small correction caused by a decrease in purchasing power and the cancellation of government support. Now the primary market has declined by 5%, which is the maximum possible decline in the current conditions. The secondary market has also undergone minor changes, but there is no significant growth, as prices have reached their ceiling.
Now, there are no prerequisites for a sharp decline in prices for new buildings. According to some, it is not necessary to talk about a 40% drop in prices during the year. Yes, there may be a slight price reduction, but not more than 5%. Building materials continue to rise in price, services are also becoming more expensive, which prevents prices for new buildings from falling significantly. At best, we can expect stagnation or a slight decline.
In order to maintain demand, developers and banks offer various special conditions. One such example is a tranche mortgage, when the loan is issued in installments, which allows you to reduce monthly payments in the early years. Many buyers choose this option, hoping for lower rates in the future and the possibility of refinancing. Interest-free installments and subsidized mortgages are also often offered, which helps maintain demand for new buildings.
Forecasts for the second half of the year and next year remain quite cautious. We expect prices for new buildings to stagnate or show a slight decrease. Demand may fall, which is due to the general economic background and a decrease in purchasing power. However, you should not expect a sharp collapse in prices. Most likely, the market will continue to seek a balance through special offers and adjustments.
Thus, we can say that in the near future the market of new buildings will be in a state of expectation and adaptation to new conditions. Prices can be adjusted, but there will be no sharp drop. It is important to keep an eye on new offers from developers and banks that will help buyers maintain interest in new buildings.
Alla Shinkevich,
CEO of the Nevsky Prostor real estate agency
Source: bsn.ru
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