Рынок жилой недвижимости в Москве

Residential real estate market in Moscow

The residential real estate market in Moscow has always been characterized by the greatest dynamics and the highest prices. It is no secret that the capital is the main point of attraction in terms of urbanization. In addition, buying an apartment in Moscow is considered an excellent investment. However, over the past year and a half, the residential real estate market in Moscow and throughout Russia has undergone significant changes. Even people accustomed to the capital’s prices per square meter, have been shocked.

Residential real estate market in Moscow — the situation at the moment

Рынок жилой недвижимости в Москве

It is difficult to name an aspect of life that would not be affected by the coronavirus pandemic. It did not pass by the housing issue either.

It was to support the demand for real estate during the epidemic that on April 23, 2020, the Government of the Russian Federation issued Decree No. 566. According to which the rate on a loan for an apartment for citizens is 6.5%, the rest is compensated by the state to banks.

The residential real estate market in Moscow and a preferential mortgage in 2020 — “who managed, he ate”.

This program was launched in addition to the “family” mortgage, which has been in effect since 2018, and caused another stir in the residential real estate market in Moscow.

According to data at the end of September 2021, since the introduction of Resolution No. 566, the price of m2 of housing in “old” Moscow has jumped by 28.5%, and in “new” by 29%. Regionally, the increase of the cost of apartments was even greater — 37.4%. According to analysts, there has not been such a surge since the 2000s.

Prices were rising at such a rate that they quickly blocked all the benefits from preferential mortgages. In the “old” Moscow, this happened already in the early autumn of 2020, and in the “new” — in October. Nevertheless, the government continued to fuel demand by extending the preferential program and the Central Bank did the same, unprecedentedly lowering the key rate to 4.25%. It is not surprising that in such greenhouse conditions, the activity of buyers grew by leaps and bounds. Given the low interest rates not only on mortgages, but also on deposits, demand was high. Not only among those who purchased housing for themselves, but also in the investment segment.

Cooling of the situation — an increase in the preferential mortgage lending rate in 2021

By March 2021, it became clear that a record reduction in the key rate led to a sharp increase in inflation in all economic sectors. The central bank had to take measures. From spring to autumn, the rate increased 6 times and ended up at 7.5%. This led to an increase in the cost of mortgages. Rates on ordinary, non—concessional loans for the period from April to October 2021 in the primary market increased by 0.69%, in the secondary market – by 0.74%. At the same time, interest rates on bank deposits began to rise, which led to an outflow of investors from the residential real estate market in Moscow.

But the main role was played by tightening the conditions of preferential mortgages — an increase in the rate to 7% and limiting the maximum loan amount to 3 million rubles.

As a result, in the second half of summer, the demand for new buildings in the Moscow region collapsed immediatly by 35%. The secondary market, as usual, does not react so sharply, but there is a decrease in sales. Prices are still rising by inertia, but this is more the “wishlist” of sellers who are trying to jump on the outgoing train. The dynamics of prices since the beginning of autumn reflects the transition of demand to the segment of inexpensive housing — the cost of Soviet “panels” in September increased by almost 2%. The expensive segment has slightly fallen in price (by 0.1%). The results are as follows: in October, the price continued to increase, but this, again, is a consequence of the policy of sellers accustomed to high demand.

The market is starting to cool down, since the increase in sales was caused by third-party factors, and not by an increase in wages among the population. As soon as the state support measures were cut, the rollback began. The cost per square meter has reached record values, and the increase in citizens’ incomes is clearly going at a slower pace than prices are rising — and not only in the housing segment. In addition, recently there has been a trend towards the so-called sharing economy. When, instead of buying a product into ownership, people prefer to rent it. This trend also applies to apartments — the demand for rental housing is growing.

Residential real estate market in Moscow — hype with rent

In any major city there are universities, colleges, etc. In Moscow — even more so. Therefore, at the end of each summer, a surge in demand for rented apartments is expected — students return from summer holidays to continue gnawing the granite of science. According to experts of real estate agencies, students make up about 60% of tenants. Another 25% are migrants who also go home to rest, and then return to work in the capital. But usually during September, everyone had time to settle down, and the excitement subsided. That didn’t happen this year. The main reason is the notorious coronavirus. Last year, the pandemic led to a real collapse in the segment of rental housing.

The reason is simple — everyone was put on a “remote”, and it made no sense for the tenants to continue paying for the apartment. It was possible to safely return to their native penates, wherever they were, and work from home. With the cancellation of the remote mode of work and study, a boom began. Students went to lectures, migrants and the population of the regions went to work. Good and inexpensive housing was instantly dismantled. Landlords began to raise prices and choose tenants more meticulously. And those, in turn, often offer to pay even more than in the ad — just to “stake out” the apartment for themselves.

The most difficult thing is for guests from the southern republics, families with children and animals. Only 10% of the owners are ready to rent an apartment to the owners of Beetles and Murziks. Many also prefer singles or childless couples with Russian citizenship.

Experts predict stabilization of the situation in the winter. By this time, the bulk of those who want to somehow solve the issue of accommodation. In addition, the cold season is the time of the traditional subsidence of rental demand, and owners have to lower prices.

Residential real estate market in Moscow and the leaders of developers

Рынок жилой недвижимости в Москве

Developers could not stay away from such a powerful surge in demand. During the period 2020 and at the end of the 3rd quarter of 2021, 20.2 million m2 of real estate was built, of which more than half is housing. Below is a rating of the best developers of the capital, without which the review of the residential real estate market in Moscow would be incomplete:

  1. PIK Company. The largest developer not only of the capital, but also of the whole of Russia. The company is represented in 11 regions and occupies an important place in the country’s economy. Since 2002, the PIK has been present on the stock market of the Russian Federation, the amount of securities issued is 1.45 billion rubles. Since 2017, the company has the highest creditworthiness rating among Russian developers — “BBB +”. The starting prices of apartments offered by the developer in Moscow are from 3.4 to 4.9 million rubles. In 2020 alone, more than 2.3 million m2 were put into operation.
  2. INGRAD. The company specializes in the construction of large residential complexes in the capital and the region, and is also engaged in investment activities. In 2020, the developer set his own record for housing commissioning — more than 400 thousand m2, and together with the Moscow region — 750 thousand m2. The developer pays great attention to the availability of social infrastructure and the comfort of living in their residential complexes.
  3. Group of companies “Moscow Mortgage Center”. The company was established in 1999 and has been engaged in real estate activity for a long time, moving into the construction industry only after 2007. Although “Moscow Mortgage Center” is engaged not only in multi-apartment housings, but also in commercial objects, the main direction is the construction of inexpensive housing on the territory of “new” Moscow and the region.
  4. «MR Group». The developer has been present on the Russian market since 2003, engaged in the construction of residential buildings and business centers. The company has 35 completed projects in the capital and the Moscow region, as well as in Sochi. In 2020, MR Group reported the commissioning of 265 thousand m2, more than 85% of the area — on the territory of the capital.
  5. Group of companies “A101 Development”. The developer appeared on the real estate market in Moscow in 2004 after the merger of the companies “Masshtab” and “Augur Estate”. The company is engaged in the complex development of the territory of “new” Moscow — builds residential complexes, business and public buildings. There are 4 residential complexes under construction, the minimum cost of apartments is from 2.1 to 3.28 million rubles.
  6. “Pioneer”. The company specializes in the construction of investment housing and comfort-class houses. Since its foundation in 2001, 0.5 million m2 of space has been built. The developer’s apartments are characterized by a convenient layout and reasonable cost.
  7. Krost Concern. This developer traces its history back to the early 90s and is a pioneer of the idea of a “yard without cars”, which has become very popular. The company has a rich portfolio (more than 450 objects) and extensive contacts, including with the ROC and the FSB. The ties are somewhat different, but nevertheless, Krost has built more than 30 churches and at the same time reconstructed the Lefortovo isolation ward. The company builds comfort-class houses with the price of a 1-room apartment of about 5 million rubles.
  8. CJSC “Leader-Invest”. A subsidiary of PJSC AFK Sistema. The developer likes to use various innovations and author’s solutions in his work. Moreover, it does it successfully — 6 residential complexes “Leader-Invest” were included in the rating of “100 best residential complexes in Russia” at once.
  9. Capital Group. Like Krost, it is one of the oldest players in the real estate market in Moscow — the company was founded in 1993. For a long time, the developer has specialized in the premium and business segment, but since 2009 he has been actively engaged in the construction of comfort-class housing – more than 1 million m2 has already been commissioned. In total, the company’s portfolio currently has almost 8 million m2.
  10. “Donstroy”. The developer specializes in the medium and high price segment of real estate and at the same time boasts almost 8.5 million m2 of rented living space. All the company’s projects are of high quality and, importantly for modern new buildings, have a developed infrastructure. “Donstroy” closely cooperates with VTB, so the appearance of long-term construction due to lack of finance does not threaten it.

In the list above, there are only the most famous developers — there are about 450 such companies in the real estate market in Moscow.

And this number is constantly being updated, which is not surprising — neither St. Petersburg nor even the resort Krasnodar Territory can compete with the capital in terms of the cost per square meter. However, the south of Russia is also a serious place of attraction for developers. So much so that the local authorities had to impose a moratorium on the issuance of construction permits, which is further discussed.

The situation with housing in the Krasnodar territory

Ситуация с жильем в Краснодарском крае

For a long time, real chaos reigned on the Black Sea coast of Russia in the field of housing construction. Developers did what they wanted. They were built on agricultural land, on the territory of the forest fund, in the seaside recreational zone. Without building permits, without observing the rules of land use and development. Moreover, they were not completed, which led to the appearance of deceived shareholders. Such a boom was caused by the active relocation of people from other regions to the Krasnodar Territory — demand gives rise to supply. However, in the pursuit of profit, developers have crossed all sorts of boundaries.

In addition to the construction of “human ant-hills” on the lands of residential housing and point-to-point development of “windows to windows” type, no one thought about whether the communications would withstand and whether there were enough schools and hospitals.

What measures is the government of the Krasnodar Territory taking?

After the resignation of the governor of the Krasnodar Territory, A. N. Tkachev, the new head of the region, Veniamin Kondratiev, began to restore order. Since 2016, an intensive fight against unauthorized construction of the multi-residential houses and sealing buildings has begun. To achieve this, the procedure for issuing construction permits is being tightened, decisions on the demolition of illegal buildings are being made more often. But it wasn’t enough. The situation was so deplorable that almost all major cities in the region had to impose a moratorium on the construction of apartment buildings. For example, in Goryachy Kluch managed to “chop off” more than a thousand hectares of forest territories for construction. In Sochi, Anapa, Novorossiysk and Krasnodar, demolition of point-built buildings and houses located in the recreational zone of the coast is actively underway. The administrations of all cities have been instructed to bring the general plans of the territories in accordance with the law. This should be finished by the end of 2023. In parallel, in the spring of 2021, the governor instructed the government to develop a development concept that will include all the conditions necessary for comfortable living:

  • availability of social infrastructure — kindergartens, schools, hospitals, etc.
  • a sufficient number of Parking spaces;
  • landscaping of the territory, including playgrounds.

Construction permits will be issued only if the project meets all the listed conditions.

The construction of apartment buildings in the region has been suspended until the concept is finalized and new master plans are developed.

How will the real estate market of Krasnodar territory react?

Over the past few years, there has been a strong increase in housing prices in the Krasnodar territory — just like in Moscow. In absolute terms, prices are, of course, lower than in the capital, but in percentage terms, the south even led to the rise in price of apartments. This is partly due to the same reasons as in the capital — a preferential mortgage and a reduction in the rate by the Central Bank. Also in recent years, there has been a large-scale migration to the Krasnodar Territory from the regions of Siberia and the Far East. People are moving away from the unfavorable climate and unemployment. The current policy of local authorities to tighten control over the construction industry, according to experts, will also seriously affect the real estate situation in the near future. The need to create a complete infrastructure, and not just place houses wherever possible, will increase the costs of developers. Accordingly, prices per square meter will also rise. Small developers who cannot afford to build a school or a polyclinic will leave the region. This will lead to a decrease in the volume of real estate being built, which may further boost prices. On the other hand, the flow of people moving will also decrease — housing built according to the new standards will no longer be affordable for everyone. But people who are more affluent and able to invest in the development of the region will begin to move, albeit in a smaller volume. As well as, the very living conditions in the Kuban with the new concept of development will become much more comfortable.

The housing market in Russia as a whole

The dynamics of prices across the country as a whole repeats the situation with the real estate market in Moscow. If the preferential mortgage has caused a boom in sales in the metropolitan region with its frenzied prices per square meter, there is nothing to say about the “cheaper” regions.

Experts of the Central Bank believe that the Russian real estate market is at the point of “overheating” — the price increase in the second quarter of 2021 averaged 20.6% across the country. This is an economically abnormal situation, which was provoked by the excessive demand, coupled with the rise in price of many building materials by 50-100%.

Concerns are also caused by the creditworthiness of the population, which can lead to a crisis in the banking sector. Citizens are rapidly gaining a debt burden, which they cannot always cope with in the conditions of falling real incomes due to the pandemic. As a result, out of the entire mass of apartments currently for sale, 25% are being sold with encumbrances, and almost 13% are going under the hammer due to the inability of the owners to pay the mortgage.

Forecast of the real estate market in Russia for the near future

Прогноз рынка недвижимости в России на ближайшее будущее

However, the situation is starting to cool down. The central bank, seeing the situation, began to raise the key rate, which pulled interest on loans. Loans are becoming less affordable, which has already led to a drop in prices on the real estate market in Moscow by 1.5%. The same dynamics is observed in the whole country. According to the results of the analysis, the residential real estate market in Moscow and the regions of Russia will not undergo a significant reduction in price. But prices will return to a reasonable threshold after a frenzied rise in 2020 and the first half of 2021. The state, for its part, is also trying to ensure stability. The government extended the “family” mortgage, ensuring sufficient demand for new buildings.

In addition, limiting the amount of a preferential loan to 3 million ruble may be significant except for the real estate market in Moscow and St. Petersburg. In the regions, this money is quite enough to purchase decent housing.

Most analysts agree that prices will continue to fall gradually during 2022. The final figures will depend on the economic and political atmosphere in Russia and in the world. The expected decrease is from 10 to 20%. To achieve final stability, it remains to be hoped that citizens’ incomes will still go up or at least stop falling.

What is the situation in the real estate market acquired under an equity participation agreement (EPA)?

Рынок жилой недвижимости в Москве

With the growth of the market, the purchase of real estate under an equity participation agreement is even more relevant. Unfortunately, the developer delays the deadline in 90% of cases. At this time, you are obliged to pay % on the loan, rent for temporary housing, and in general, your life will not be the way you expected — in that case you can receive mental harm for yourself. According to the federal law 214-FZ, you have the right to collect a penalty under the EPA, but many cannot make a statement of claim that the court will accept.

We have to seek the services of lawyers, and a number of problems arise:

  1. The amount of the penalty is less than the amount of the lawyer’s services.
  2. There are unscrupulous lawyers who take money and disappear, or delay the deadlines.
  3. A lawyer will not give a 100% guarantee of collecting a penalty for an EPA — you can simply lose time and money.

The specialists of our consulting company APEXCOM have come up with a way to help citizens recover the penalty for EPA on their own. To do this, we have developed an application of the same name with the functionality of automatically drafting a statement of claim according to all the rules.

Приложение по взысканию неустойки ДДУ

APEXCOM-BOT is a free application that has passed all the checks and is available on the official Google Play and AppStore stores. At the moment, the application is completely free and works without commission, as we collect statistical data and improve the functionality. You have a unique opportunity to use our application and return the penalty under the equity participation agreement!

Download the application for free and start the process of collecting a penalty from the developer without any investment:

Разрабатываем Стратегии для собственников бизнеса в целях оптимизации группы компаний, решения нестандартных задач и продажи активов. Оказываем услуги по сопровождению сделок M&A, управлению непрофильными активами и проектами в целом.

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