Moscow developers lure clients with growing discounts

Buyers are offered discounts from 5-10 to 30% of the declared price.
Increased competition makes developers increasingly make concessions to customers. During the year, the share of projects where apartments are sold without additional discounts, fell by 2.5 times. Now the discount is not only in 3% of Moscow's new buildings. In all other cases, buyers can expect a price reduction of 5-10%, and sometimes almost 30%.

For a year the share of development projects, housing in which is not realized without special discounts, decreased from 8% (11 objects) to 3% (25 properties). These data lead analysts "Metrium" in its study on the results of the first half. According to their calculations, now discounts are initially announced in 220 sold residential complexes (LCD), which is 61% of the projects being implemented. During the year, this indicator increased by 10%. The number of LCDs, where apartments can be purchased at an individual discount, for the year increased by 60%, to 124 complexes, this is 36% of the total number of apartments sold.

A similar trend was noted by other consultants. Natalia Kuznetsova, General Director of Bon Tone agency, points out that a substantial part of the lots are now sold at a discount of 3-5%, in some situations, the discount amounts to 25%. She associates this with a sharp increase in supply: in the first half of the year 26 new projects were withdrawn and sales began in 38 new buildings. "Taking into account all existing supply volumes, developers have to exist in conditions of quite serious competition," explains Ms. Kuznetsova. The head of work with key partners Est-a-Tet Roman Rodiontsev calls the second reason for additional developer discounts - the desire to compensate for the price increase. "There are single projects in which prices were raised by 7-9%, while in them, the discount was increased to 10-13%," he calculated. The developers themselves assure that the additional discounts are not related to the difficulties in attracting buyers. "Now the cost of housing is the one to which the developer is seeking," says Andrey Krivos, the development director of the Granel Group of Companies.

According to calculations of "Metrium", most often discount is offered to buyers of high-budget housing: here special conditions are offered in all projects that are being implemented without exception. The maximum amount of discounts provided reaches 29%. Like the entire Moscow primary housing market, the premium segment this year has faced a sharp increase in supply. According to Welhome CEO Anastasia Mogilatova, now the average discount for premium accommodation is 7-10% against 5% a year earlier.

In the mass segment of Moscow, the maximum amount of discounts is comparable with the high-budget and reaches 28%, analysts say "Metrium". But, according to their data, you can get such a discount only in one apartment complex, in most cases it is a question of price reduction by 5-10%. Sales without shares on the market are conducted only in two Moscow residential complexes.

Changes in the policy of developers in the near future is unlikely: the competition among them, apparently, will only increase. According to data of Moskomstroyinvest, in the first seven months of this year, 117 applications were approved to receive a statement on the compliance of the project declaration, allowing developers to begin selling housing. Relative to the same period last year, this indicator has more than doubled. Activity of developers is connected with changes in the legislation complicating the mechanism of attraction of means of co-investors. "These volumes of housing will restrain growth even with respect to those facilities that will be withdrawn from July 1, 2018 and will be amended," - predicts Natalia Kuznetsova. However, the head of the analytical center "Inkom-real estate" Dmitry Taganov suggests that in the long term the situation will be corrected. "Changes in the legislation will lead to monopolization of the market, when only large developers who are able to work in the new tough conditions will remain, and the lack of competition helps to reduce the volume and variability of supply, as well as price increases," he said.