Apartments in Moscow began to sell with a 20% discount

A cold storm front appears to be heading into the “overheated” Moscow housing market. In August, for the first time in its history, there was a sharp drop in the cost of the capital’s “squares”: the gap between the exposure price and the transaction price averaged 15%. Despite low-cost mortgages and the stubbornness of sellers, this fall, square meters in the Moscow macro-region are likely to fall in price even more, experts are sure.

What’s happening?

In the past two years, housing prices in Russia have almost doubled. And Moscow was no exception. But the boom seems to be over, and the capital’s secondary real estate market was on a swing. Andrey Serdyuk, the head of the Etazhi sales department in Moscow, believes that two main factors have shaped the volatility. Firstly, the competition for the buyer has increased due to the increased volume of supply. Secondly, the share of objects with urgent sale, where the owners are ready to reduce the price in order to speed up the transaction, has increased.

In July and August, the transaction check was on average 15% less than the originally set price, the maximum discount is 20%, Sergey Shloma, director of the secondary market department of INCOM-Realty, said: “For the first time in the history of the secondary market, such a sharp drop in value has been observed. This is due to the fact that the market is in non-standard conditions due to a special operation, housing prices are overheated. And many apartment owners understand that they will be able to sell their objects only if the cost decreases,” the analyst noted.

“After a crazy, unrealistic increase in real estate prices, people began to soberly assess the value of their properties and put them up at prices close to reality,” says Irina Pesic, managing director of the MIEL office network. “There are sellers who are still trying to catch their bird of happiness by the tail and solve all their financial issues by selling a secondary apartment, but there are fewer and fewer of them.” According to her, while the volume of supply, which is about 44.5 thousand objects, still exceeds demand.

According to Yulia Dymova, director of the Est-a-Tet secondary real estate sales office, preferential mortgages in the primary market indirectly affect the secondary real estate. Many are interested in preferential programs, especially in low rates, for example, to purchase a new building at 0.1%. “But most of the transactions are now on the secondary market – to solve an urgent housing issue. To buy the same new building, you need to form a down payment, which often consists of funds from the sale of the “secondary”. Of the major expenses, housing is the last thing people are willing to give up. They save on vacation, on the education of children, but housing is necessary, ”the expert believes.

Yulia Dymova noted the flow of demand from old Moscow to New Moscow and the Moscow region, where housing is much cheaper: “Many people buy properties in the region, where the price of real estate is lower. This is an indirect echo of the demand recovery trend. When cheaper objects are washed out, and then more expensive ones will be bought.”

We add that last summer residents of Azerbaijan, Uzbekistan and Kyrgyzstan began to take an active interest in Moscow real estate. When choosing an object, they prefer houses located near the metro. For example, among the Kyrgyz today, the most popular station is Novokosino.

What and how much?

“In August, the average cost of a meter in the secondary market of the capital decreased by 1.1%, to 259.6 thousand rubles. And the closer to the Moscow Ring Road, the faster prices fall in New Moscow and the Moscow Region, ”said the analysts of the AC IRN. If the Novomoskovsky district adjacent to the Moscow Ring Road lost 0.5% (see table), then the Troitsky district showed a symbolic plus (+0.1%).

According to Dymova, in August, within the old boundaries of Moscow, the average cost of studios was 8.2 million rubles, one-room – 13.0 million rubles, two-room – 20.3 million rubles, three-room – 34.7 million rubles. In relation to the beginning of the year, only the cost of studios increased (from 7.7 to 8.2 million rubles), the cost of one-room apartments remained practically unchanged (13.1 million rubles at the beginning of the year and 13.0 million rubles in August). The average budget of the “kopeck pieces” put up for sale has decreased by 400 thousand rubles. (from 20.7 to 20.3 million rubles). The average budget of “three rubles” has adjusted more significantly – from 37.8 to 34.7 million rubles.

At the same time, the average budget for rooms differs significantly by districts of Moscow, says Dymova. The most expensive price tag, as always, is in the Central Administrative District, where the average budget for one-room apartments is 22.4 million rubles, two-room apartments – 40.7 million rubles, three-room apartments – 73.6 million rubles. The most affordable budgets from the districts of Moscow within the old boundaries are in Zelenograd Autonomous Okrug: a studio on average – 6 million rubles, a one-room apartment – 8.6 million rubles, a two-room apartment – 11.1 million rubles, a three-room apartment – 15.4 million rubles. It is followed by the availability of budgets SEAD and VAO.

Andrey Serdyuk noted affordable prices in the Vostochny districts (outside the Moscow Ring Road along the Schelkovo highway. – “MK”) and Zapadnoye Biryulyovo, as well as in the southeast and east of Moscow.

What’s next?

Of course, both buyers of the capital’s “squares” and their sellers are interested in experts’ forecasts regarding price dynamics. But their opinions differed. According to Yulia Dymova, the capital’s real estate will always be in price: “Now they will sort out cheap objects and will buy more expensive ones.” Irina Pesic believes that in the fall there will be a complete recovery of the capital’s real estate market.

Andrey Serdyuk, on the contrary, is sure that “calm” is still far away: “Further reduction of the key rate of the Central Bank of the Russian Federation may warm up prices for secondary housing. In this case, you can expect an increase of up to 1% per month. Growth will be held back by rising supply. Low-liquid objects with large areas and in low-demand areas will traditionally become cheaper.”

“Many apartment owners are hoping for a quick revival of the market in the fall, so they do not want to rush to meet buyers. However, given the continued growth in supply (+20-25% in August alone), low demand and huge discounts on apartments in old Moscow, these hopes are unlikely to come true. Most likely, in October-November, when sellers realize that a miracle did not happen in September, the price drop will accelerate,” the AC IRN said.

If demand fizzles out under the pressure of any external factors, apartment prices will inevitably decline, Sergey Shloma concluded. According to his forecast, there is a potential for further price reductions, gradually in the future, by the end of the year, they may decrease by another 15%.