Signed – and from the shoulders of housing – Newspaper Kommersant No. 7 (7452) dated 01/17/2023

At the end of 2022, half of transactions with secondary housing were made by proxy, which was the highest figure in the entire modern history of the Russian real estate market. This is the result of the hasty sale of their apartments through intermediaries by Russians who left the country. There could have been more deals, but sometimes mortgage banks and insurance companies refused to conclude them, fearing potential risks.

As calculated for “Kommersant” in the investment company “Flip”, in 2022, 50% of transactions for the sale of housing on the secondary market throughout the Russian Federation were made through a notarized power of attorney. This figure was a record for the entire history of market observation. So, according to analysts, in 2021 there were no more than 20% of such transactions, in 2020 – 15%, in 2019 – 8%, in 2018 – 5%.

In the country as a whole, according to the results of 2022, 3.9 million transactions were concluded in the secondary market, which is 7% less year-on-year, explains Flip CEO Evgeny Shavnev. Most of this volume fell on Moscow, the Moscow region and the Krasnodar Territory.

Elena Mishchenko, head of the urban real estate department at NDV Supermarket Real Estate, confirms this trend. According to her, in Moscow and the Moscow region until September 2022, the share of transactions for the sale of finished apartments by proxy did not exceed 5%, the surge began after the announcement of mobilization and their volume reached 20% by the end of the year. Miel’s managing director, Irina Pesic, says her company closed 35% of such deals in 2022. In Moscow, no more than 5% of apartments were usually sold on the secondary market, but this share increased by 3.4 times last fall, adds Natalya Kiseleva, legal adviser of the Akademicheskoye office of Inkom-Nedvizhimost.

The surge in power of attorney transactions is the result of the departure of Russians after the start of the Russian military operation in Ukraine. Only in Turkey in 2022, 153,000 Russian citizens received a residence permit, the country’s migration department reported. “Often we come across not only powers of attorney confirmed by Russian notaries, but also foreign specialists and the Russian consulate abroad,” explains Natalia Kiseleva.

However, there could be more such transactions. According to Irina Pesic, before leaving the Russian Federation, some owners, instead of powers of attorney, made donations for apartments to close relatives, who then sold the housing.

However, Sergey Chuzhakov, Deputy Head of the Legal Department of the Etazhi Agency, recalls that now it is possible to execute transactions remotely using the electronic signatures of the seller and the buyer.

As a rule, when selling an apartment by proxy, the price for it is at least 10% lower, Irina Pesic notes. But now, she continues, in the secondary market, prices continue to decline and sellers of apartments are ready to give more significant discounts. But, even despite the discounts, potential buyers are not always willing to agree to such deals, Elena Mishchenko notes.

Natalya Kiseleva says that 50% of Russians are still wary of such deals and refuse to conclude them, seeing for themselves the risks that may arise later. For example, there is a high risk of encountering fraud or making mistakes in the sale and purchase agreement, which are difficult to correct without the owner, she adds. But earlier, even more Russians did not trust sellers with a power of attorney. According to Flip, in 2021, only 30% of respondents were ready to make a deal by proxy, and in 2022 the share of such citizens increased to 60%.

However, deals are not always broken due to distrust of the buyer or seller. Natalya Kiseleva says that banks are scrupulous about selling real estate by proxy, realizing that it carries additional risks. But the main initiators of refusals from such transactions are most often not banks, but insurance companies when it comes to insuring a mortgage transaction, she adds.

In 2023, the share of transactions by proxy will remain at the same level, Yevgeny Shavnev predicts. He believes that new objects will go on sale, whose owners are not located in Russia and have already been able to decide on a place to stay in the near future. Irina Pesic, on the contrary, believes that the majority of objects are either already put up for sale or sold, so the share of transactions by proxy will not increase. Natalya Kiseleva agrees that if there is no mass outflow of Russians in 2023, the share of such transactions will return to their usual values.

Daria Andrianova