The situation on the secondary housing market in Russia in December 2023

Due to rising mortgage rates, the flow of up to 20% of potential buyers into the segment of new buildings and a limited number of liquid offers, the demand for secondary housing is slowly declining. But the cost of supply continues to rise: over the month, average prices in the largest regional markets increased by 1.1–2.5%. Analysts attribute the trend to inertia, expecting that next year the number of transactions will decrease by almost a third, prices by 10%, and sellers will be more likely to be ready to make concessions.

The average cost of secondary real estate in the 18 largest regional markets in Russia (16 cities with a population of over a million, Moscow and Leningrad regions) in December amounted to 137.6 thousand rubles. for 1 sq. m, an increase of 1.1% compared to the previous month, was calculated in Cyan.Analytics. Experts recall that in the previous few months, housing prices rose by an average of 1.5–1.8% per 30 days. Etazhi estimates the increase in the cost of resale in Russia as a whole at 1.05% per month, to 120.4 thousand rubles. for 1 sq. m. Analysts at Avito Real Estate noticed an increase of 2.5% per month and 10.9% per year, to 97 thousand rubles. for 1 sq. m. The average cost of a lot on the secondary market, according to analysts, is now 4.85 million rubles. Year on year it grew by 15.5%.

Most pronounced growth the average cost of secondary housing per month in “Cyan.Analyst” was noted in Chelyabinsk: the value increased by 4.1%, to 97.6 thousand rubles. for 1 sq. m. In Avito Real Estate they talk about an increase of 4.3% in the indicator In Volgograd, up to 86.3 thousand rubles. for 1 sq. m. In “Etazhi” they see an increase of 3.4% per month in the cost of “resale” in Rostov-on-Don, up to 118.1 thousand rubles. for 1 sq. m. In St. Petersburg, according to Avito Real Estate estimates, the offer price is now 185.4 thousand rubles. for 1 sq. m: over the month the value increased by 1.3%, over the year – by 2.7%.

In Moscow, according to calculations by Cian.Analytics, the average cost of a secondary supply is now 318.2 thousand rubles. for 1 sq. m, over the month the value increased by 0.5%. In outskirts of Moscow the dynamics was 0.2%, the cost increased to 162 thousand rubles. for 1 sq. m. Director of the “Secondary Market” direction of the Inkom-Real Estate company Sergei Shloma adds that the average price of an apartment in “old” Moscow now it is 14.42 million rubles. Over the month, the value increased by 0.3%, over the year – by 0.6%.

The director of Etazhi, Ildar Khusainov, attributes the continued rise in prices to inertia: “After the excitement of the end of summer and beginning of autumn, the owners have not yet fully felt the decline in demand.”

The cooling of the market, according to the head of Cyan.Analytics, Alexey Popov, is indeed moderate: user activity decreased by about 6% over the month.

The head of the secondary and suburban areas of Avito Real Estate, Sergei Khakhulin, adds that demand for secondary housing lags behind the same period last year by 14.5%. Mr. Shloma calls the activity of potential buyers in Moscow stable.

Alexey Popov explains that, on the one hand, the end of the year is a high period on the secondary market, on the other, now demand is significantly restrained by high loan rates. The expert considers mortgages an important, but not decisive, tool for the secondary market: there are many alternative transactions where the volume of additional funds is not so large. Some buyers could still reorient themselves to the segment of new buildings with more affordable loans, Mr. Khusainov believes. Such a decision, according to Mr. Shloma, can be made by approximately 20% of buyers in Moscow. He associates the trend not only with mortgages, but also with a limited selection of quality lots.

Subdued demand is contributing to a slow recovery in supply. In the 18 largest regional markets, according to Cian.Analytics, 175 thousand secondary lots are now available – 2% more than last month. “With a dramatic reduction in the number of transactions, exposure would grow noticeably faster,” notes Mr. Popov. Against this background, owners are in no hurry to adjust prices. Many, due to rising rental rates, according to Mr. Khusainov, decided to rent out their properties in anticipation of buyers. Although Sergei Khakhulin, on the contrary, noticed a slight reduction in the average period of exposure of advertisements, suggesting that owners in general began to enter into transactions faster. Sergei Shloma says that he does not yet see liquid lots accumulating on the Moscow secondary market.

At the same time, the expert calls a further decline in demand inevitable, suggesting that in 2024 the number of transactions will decrease by 30% to standard values.

In the short term, Alexey Popov does not predict any noticeable fluctuations in prices on the secondary market due to the approaching New Year holidays. Then, limited demand, he said, may still encourage owners to lower prices a little. Mr. Khusainov also does not rule out an increase in discounted offers on the market in January-February. It is this process, in his opinion, that can partially return buyers to the market. “There is a category of buyers who need finished housing, not housing under construction,” the expert recalls. Sergei Shloma expects a reduction in average prices on the secondary market by 10% in 2024.

Alexandra Mertsalova