Buyers sold out new buildings, stimulating price increases

The tightening of lending conditions under preferential mortgage programs following an increase in the key rate has led to a rush of demand for new buildings. Over the month, average prices in the largest cities showed the most pronounced increase over the past year and a half. This is explained both by the washing out of the most budget proposals and by the indexation of prices by developers. Subsequently, buyer activity may slow down, but the inertial rise in prices on the market will continue for at least one and a half to two months.

The average cost of primary real estate in the 18 largest regional markets in Russia (16 cities with a population of over a million, Moscow and Leningrad regions) in September amounted to 152 thousand rubles. per sq. m, having increased by 3.6% over the past four weeks. Such data are provided in CIAN.Analytics. This is the most pronounced monthly dynamics over the past year and a half: the last time such a pronounced increase in prices was recorded in March 2022, when by February the average supply price increased by 5.5%.

According to Etazhi’s calculations, the average cost of new buildings in Russia as a whole is now 121.8 thousand rubles. per sq. m. Over the month, the value increased by 1.1%, over the year – by 5.2%.

Prices were affected by both the actual increase in cost and the change in the supply structure over the past month due to high demand – the most affordable options are sold out first, explains Etazhi sales director Sergei Zaitsev. The average budget for purchasing an apartment on the primary market in Russia, according to Avito Real Estate, is now 6.3 million rubles; compared to the previous month, the value increased by 4.7%.

Etazhi analysts noticed an increase in the average cost of new buildings per month in all cities where they operate. The most pronounced dynamics were in Tyumen, where the value increased by 3.6%, to 116.5 thousand rubles. per sq. m. In Saratov, the growth was 2.9%, to 63.7 thousand rubles. In Surgut – 2.8%, up to 112.4 thousand rubles. In CIAN.Analyst, the largest increase in prices was recorded in Nizhny Novgorod – by 7% per month, to 158 thousand rubles. per sq. m. In Volgograd, the dynamics was 6%, to 107.1 thousand rubles. per sq. m. In St. Petersburg, according to analysts’ calculations, new buildings now cost an average of 247.1 thousand rubles. per sq. m. Over the month, this value increased by 4.7%, over the year – by 1.9%. In Moscow, similar dynamics amounted to 1% and 2.3%, respectively, to 332 thousand rubles. per sq. m.

The head of the primary direction of Avito Real Estate, Dmitry Alekseev, notes that the demand for primary real estate over the past month has increased by 9.5%, being at the same time 31.2% higher than last year. In annual dynamics, the fluctuation is largely due to the negative environment associated with the announcement of partial mobilization last September. Sergei Zaitsev associates the general revival in the market with the desire of clients to conclude a deal faster: from September 20, the minimum contribution for mortgage programs with state support will increase from 15% to 20%.

The surge in activity coincided with expectations of an increase in rates due to promotion Central Bank key rate. The head of CIAN.Analytics Alexey Popov reminds that August it was a great day The primary market is quite active.

In the Moscow region, the number of registered equity participation agreements for the month increased by 38% (up to 18.5 thousand), in the St. Petersburg region – by 46% (up to 7.7 thousand), in other million-plus cities – by 45% (up to 22 thousand). “Record or close to record sales volumes have been recorded everywhere,” says Mr. Popov. Good sales, in his opinion, stimulated some developers to index prices. Thus, in the Moscow region, the organic increase in supply value (how much a lot becomes more expensive while on display until the transaction) is now 7.5%, although in the spring it was about 2–3%, the expert says.

Active sales help reduce exposure. The volume of primary offers on the market, according to Dmitry Alekseev, decreased by 5.5% over the month. Although compared to the same period last year, the figure is 38.5% higher. Now we are talking about the implementation of advanced demand, then the market will need time to adapt to new lending conditions, warns Mr. Zaitsev. Dmitry Alekseev also warns about the short-term nature of the revival, drawing attention to the significant growth in exposition over the past year: so far it has greatly outpaced demand.

Sergei Zaitsev does not expect prices for new buildings to decline in the medium term, guided by inflation risks, instability of prices for building materials, and so on. Developers strive to include all risks in the price, he notes. But as demand cools, the dynamics of housing prices, according to the expert, will return to near-zero dynamics, and buyer activity will again have to be stimulated by discounts. Although Alexey Popov warns that even with a decrease in demand, nominal supply prices will continue to rise for another six to eight weeks due to inertia.

Alexandra Mertsalova