In Moscow, the number of ads for the urgent sale of apartments has tripled

Ready to trade

Sergey Shloma, director of the secondary market department of INCOM-Nedvizhimost, told MK that in the first days after the announcement of partial mobilization, the number of applications for the urgent sale of apartments increased sharply by 3 times, demand fell, but the market calmed down the next week. Sellers and buyers are adapting to the new conditions, the volume of calls, inquiries and advances is being restored. “Today the sellers are ready to bargain. We do not record a tendency to provide large discounts: even with an urgent sale, the discount is on average 10-15%, not more. The maximum discount is 20%,” the expert noted. In his opinion, in the near future we should expect a decrease in the number of transactions and prices. “Almost all sales will take place at a discount,” Shloma is sure.

“During the last week of September, we recorded systemic refusals from transactions that practically did not affect economy-class real estate. To a greater extent, this concerned objects of business class and above. Now there are fewer failures,” added Alexander Moskatov, managing director of the Miel network. He also noted that a number of large banks, in particular, MKB, Zenit, Alfa-Bank, began to raise rates on mortgage programs.

“Now sellers can be conditionally divided into three categories,” Yulia Dymova, director of the Est-a-Tet secondary real estate sales office, told MK. Firstly, the sellers are “on emotions”, who, for a number of reasons, want to get rid of their objects as quickly as possible. Their behavior is unstable, they agree to big discounts, and after an hour they often change their mind.

Secondly, the sellers of rental apartments. These include the owners of mortgaged apartments, which were rented out, and the loan was repaid from these funds. The rental business is currently operating in conditions of high supply and low demand. Renters can quickly pack their bags and move out. The owners understand that their apartment will be idle and will not bring income.

Thirdly, calm sellers who solve the housing problem regardless of the situation on the market. They are ready to go for reasonable discounts, based on the real state of the apartment being sold and their own needs.

“Despite the rather heated information background, there are practically no huge discounts on the market, these are rather “phantoms”, most often isolated cases. At the same time, a significant number of buyers really hunt for such “ghosts”. We record calls from buyers-“investors” when they offer to buy an apartment, conditionally, for 40 million right now, but for 25 million. Sellers do not go for such discounts. The average discount has not changed much and does not exceed 5% for liquid offers,” Dymova said. She advises keeping a cool head and solving the issue of housing based on her true needs.

familiar scenario

Oleg Repchenko, Head of the Real Estate Market Indicators AC, has a different view on the situation in the secondary housing segment. According to him, the average cost of an Old Moscow square meter has been decreasing since May, having decreased by 5.2% over five months. In September, apartments in the capital fell in price by another 0.7% – up to 257,700 rubles. per square meter on average. In New Moscow and the Moscow region, where apartments have also become cheaper over the past 4 months, the fall in prices slowed down during the first month of autumn: in New Moscow, the housing cost index lost only 0.2%, and there was no decrease in the Moscow Region. The increase in supply volumes (by 35-45% in August-September), which, in theory, should, on the contrary, bring down the price, affected.

“New sellers, putting their apartments up for sale, were afraid to sell too cheap, hoping for a market recovery against the backdrop of a reduction in the key rate of the Central Bank. However, the increase in supply volumes to record levels shows that there are now much more people who want to sell an apartment than buy,” the analyst emphasized. In order to realize the entire volume accumulated in the market, sellers need to meet buyers halfway and lower prices. Real deals are already being made at big discounts,” Repchenko added.

According to him, the partial mobilization announced in Russia has increased the degree of uncertainty in the market, so in the coming weeks, confused sellers are unlikely to significantly change the offer prices. However, in a few weeks, apartment owners will realize that housing is not being sold at the declared cost, but they have more and more competitors. So somewhere in November, the rate of decline in prices for apartments may accelerate again.

And prices have room to fall, Repchenko is sure. The situation on the real estate market is developing according to the scenario of 2014–2017, when a short period of hype, also provoked by sanctions and the collapse of the ruble, was followed by a long period of downward slide in prices. In the next two years, the cost of a meter fell by 10–20% (depending on the segment). Under current conditions, the depth of the fall may be greater. Because a bubble has inflated in the market: for 2020-2021. the cost of apartments increased by 1.5 times. If at the beginning of 2020, 1 square meter of housing cost an average of about 180 thousand rubles, then today it is 260 thousand. there is a decrease of up to 30% depending on the class of housing.

“Overheated” new buildings

According to Repchenko, a similar situation has developed in the primary market: housing prices are at an all-time high level. Contributes to this and preferential mortgage, which artificially, through budget subsidies, stimulates the demand for new buildings. In addition, developers, within the framework of preferential state programs, additionally subsidize mortgage rates to almost zero, while at the same time raising apartment prices by 20-40%. At the same time, huge discounts are offered to those buyers who do not use the “zero mortgage”. “In September, the size of the discount in Moscow reached 22%, in October there were discounts up to 25%. That is, the real cost of apartments without subsidized doping is much lower than what is currently on the market. If there are no cheap mortgages, developers will have to start lowering prices, ”concluded the analyst.

“The events of 21 September had a noticeable impact on demand. In the primary market, the number of applications from potential buyers and the transactions themselves decreased. First of all, this is due to the caution of customers who have taken a wait-and-see attitude, ”Nadezhda Korkka, managing partner of Metrium, told MK. According to her, prices in September fell by 1.6% compared to the previous month. It is likely that this decline occurred just in the last ten days of September.

“Partial mobilization actually paralyzed the market for the first few days. During this period, the number of requests from potential buyers of housing in new buildings decreased to almost zero, and appointments, as well as previously paid apartment reservations, were cancelled. In addition, many clients decided to wait for changes in borrower support measures, mortgage rates, and loan holiday rules,” said Vladimir Shchekin, co-owner of Rodina Group IDH. However, in the last few days, the situation, in his opinion, has begun to improve, appeals have reappeared, but customer interest is still low and amounts to approximately 30–40% of the normal level of buyer activity for September-October.

In the current situation, a potential buyer has a large selection of new apartments for any budget. The main thing is to have a stable solid income. “If you are planning a deal involving a mortgage, then keep in mind that in the future banks may tighten requirements for borrowers or increase the size of the down payment. Insurers, whose services are also indispensable, can similarly revise the terms of contracts – this is quite logical given the increasing risks, ”said Dmitry Golev, Commercial Director of Optima Development.

What’s next?

Making forecasts for the future in the current environment is extremely risky, experts say. “Much will depend on changes in the political and economic environment. At the moment, the average price per square meter in new buildings in Moscow is at around 416 thousand rubles. It is likely that if the current conditions are maintained, the price will remain in the same range in the coming months, but with the possibility of adjustment by 5–10%,” Nadezhda Korkka believes.

“Most likely, until the end of the year, prices for new buildings will not increase, since demand will decrease, and competition from developers will increase,” Shchekin explained. In this situation, even significant individual discounts are possible – and this is another reason to consider housing options for purchase right now. In New Moscow, 1 “square”, according to his forecast, will still cost about 200-220 thousand rubles, in the old one, depending on the market segment, from 280-300 thousand rubles.