Escroum suburban housing – Newspaper Kommersant No. 40 (7485) dated 03/10/2023

Demand for suburban housing, which almost died out last year, began to recover, which developers are already trying to take advantage of. Thus, Smart Development, which built mainly logoparks in the Moscow region, is launching a separate line in the IZHS segment. The limited number of foreign resorts, where they traditionally rented housing for a long time, and the launched system of escrow accounts for private houses, could contribute to the return of Russians’ interest in living outside the city, experts say. However, they warn, it was difficult for new players to implement such projects without losses even before the crisis.

Smart Development, which built warehouse real estate in the Moscow region, decided to enter the suburban housing market. “Kommersant” found on the HeadHunter portal a company announcement about the search for a leader in the development of this direction. According to a Kommersant source close to the company, the developer has already collected a land bank in the Moscow region for individual housing construction (IZHS). The first such project, Trilogy Cottage Village, can be implemented in the Dmitrovsky District.

In addition, the interlocutor of Kommersant adds, the company will retain the Ratio Dom division, which builds country houses on individual projects to order. Smart Development did not provide any comments.

Demand for suburban real estate began to grow in the midst of a pandemic. A survey conducted in 2021 by Dom.RF and VTsIOM showed that 68%, or 41.6 million, of Russian families would like to live in an individual house. At the same time, a number of large developers of apartment buildings – PIK Group, Samolet, Ingrad, LSR, FSK – announced the launch of projects in the IZHS segment. But due to the crisis caused by the Russian-Ukrainian military conflict, which led to a decrease in demand for such houses, some companies have postponed the start of such projects.

According to CIAN. Analysts”, in January-November 2022 throughout Russia, the potential activity of those who want to buy a house turned out to be 12% lower year-on-year. Olga Magilina, managing partner of Nordhus, says that in the Moscow region last year the demand for suburban real estate fell by 30-50%.

However, since the beginning of 2023, the activity of buyers in this segment began to recover, says Maxim Leshchev, CEO of Geo Development Group. In January 2023, the number of requests increased by 42% compared to December 2022, analysts at Zaikin Trades add. They say that this may be due to the desire of the Russians, who before the crisis rented housing for long holidays in foreign resorts, have now decided to reorient themselves to the domestic market due to problems with flights. But Olga Magilina believes that this is not the main factor in the recovery of demand for suburban real estate, as Turkey and Thailand, for example, remain open to Russians.

A significant factor in the recovery of demand could be the massive launch of mortgage lending programs by banks in the IZHS segment, Tatyana Ananyeva, head of the suburban real estate department of the Sushchevsky office of the Miel company, believes. According to her, in January-November 2022, the number of loans issued for the purchase of houses has already increased by 16% year-on-year.

In addition, a system of escrow accounts has appeared on the suburban housing market, by analogy with multi-apartment construction, which allows homebuyers not to lose their funds in case of bankruptcy of the developer. The first escrow accounts in the IZHS segment were opened by Dom.RF Bank in December 2022.

The risks for developers entering the IZHS market are still high. Practice shows that it is sometimes difficult for new players in this segment to implement a project even with “zero” profitability, Maxim Leshchev says. Only in fairly successful IZHS projects, profitability exceeds 20%, but such projects are rare, says Olga Magilina. According to her, while demand still remains low, it is hardly worth counting on significant profits for suburban housing developers.

Daria Andrianova