Housing developers from July 1 will raise prices for apartments

Developers are pushing Russians to invest more actively in permanently cheaper housing.
Most of the major housing developers, interviewed by Vedomosti, plan to raise housing prices from July 1. This is from the Moscow billboards already warns customers the largest developer of housing in Russia - the PIK group. Specific figures will be known after July 1 and will depend on the project and the area of ​​the apartment, says the employee of the company's sales office. The representative of PIK informed about the upcoming price increase.

Depending on the particular object or building in the "Level Amurskaya" complex, the cost of real estate here will grow within 5%, General Group CEO Kirill Ignakhin said. The cost of square meters in separate projects "Leader of Invest" (included in AFK Sistema) will increase by the same amount from July 3, his representative said. Apartments in the facilities of GC "Granel" will rise in price by 2-3%, according to its sales director Rustam Arslanova. At 1-3% the cost per square meter in the residential complex Headliner, which is being built at the site of the mill № 4 in Shmitovsky Pass, will increase, warns the representative of the group "Cortros". Separate projects will rise in price and Capital Group. The apartments of GK "Osnova" and Tekta Group will rise in price, respectively managing partner of the first Oleg Kolchenko and general director of the second Roman Sychev, without specifying the details.

In the first days of July, a one-time price increase in the range of 1-2% was planned by other metropolitan developers, said Maria Litinetskaya, managing partner of the company "Metrium". "Development-South" from Krasnodar regularly reviews prices for the past few months, says the vice-president of the company Mikhail Popenko: the price list since July 2 has already been formed and some positions will also rise in price.

 The total increase in the price of apartments by the developers coincided with the entry into force of amendments to the law on share participation in construction, significantly tightening the rules for the sale of housing in Russia (for details, see pp. 8-9). From July 1, only companies that meet certain requirements will be able to build and sell housing in Russia. So, developers should have a three-year experience in the construction of projects of at least 10,000 square meters. m and not less than 10% of own funds on the account, and so on.

Any changes in the legislation that lead to additional stress on developers affect the final cost of the apartments, says Roman Rodiontsev, head of key partner relations with Est-a-Tet, so that after July 1, prices will increase in proportion to the developer's costs. Moreover, now it will be unprofitable for them to sell large amounts of goods quickly and at a minimum price at the expense of discounts and promotions, the expert points out.

Most builders call the July price increase planned. The main reason is the growth in demand for new buildings, says Arslanov. Mortgage rates continue to decline and, as a consequence, housing becomes more accessible, the representative of PIK Group reminds. At the same time, he admits: "Changes in legislation, of course, affect the industry." The increase in prices allows a slight decrease in sales, which have acquired an exasperating character in the last month, and prevent a deficit, Alexander Zubets, the director of Novye Vatutinki, complains. Vice President of the Leader of Investments Alexei Boldin, as well as Kolchenko, Sychev and Ignakhin explain the increase in the cost of apartments, including the increase in the construction readiness of the facilities. The cost of housing affects the rise in price of construction materials, including because of rising prices for gasoline, Popenko notes.

Analysts, by contrast, call the actions of developers "a marketing step". "The constant rise in prices allows us to attract buyers with a simple motive - buy today, and then tomorrow will be more expensive", - said Alexander Pypin, the leading analyst of CICA. In his opinion, there is no direct connection between the price increase and the entry into force of the amendments. With him agrees and the head of irn.ru Oleg Repchenko, who recalls the overabundance of supply in the housing market. Litinetskaya also believes that some market players decided to create an agiotage amid the amendments entering into legal force, speeding up the time of making a decision on transactions.

Changing legislation will lead to higher prices, but in the long term, Pypin notes: competition in the market will gradually decrease - small and medium-sized developers will not be able to launch new projects, and large ones will sell less apartments at the stage of the excavation, i.e. at low prices. This can happen in a year or two, when the current offer will be sold and there will be a certain deficit of apartments, agrees Repchenko. According to our forecasts, prices will grow by 5% per year, said a representative of the PIK group.