Moscow real estate will face a fall in prices

Analysts blame the Moscow renovation program, which will accelerate the decline in the cost per square meter.
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Now apartments in capital new buildings are getting cheaper by about 10% per year because of the oversupply of supply and the decline in effective demand. The renovation program of five-story buildings will only strengthen this trend.

The launch of the renovation program of five-story buildings in Moscow will accelerate the fall in prices for residential real estate: in the next few years, the capital's housing may be cheaper by 30%. Such a forecast was given by the head of the analytical center "Indicators of the real estate market IRN.RU" Oleg Repchenko. Now, according to the analyst, apartments in new buildings are getting cheaper by about 10% per year because of the oversupply of supply and the decline in effective demand.

Earlier, the mayor of Moscow, Sergei Sobyanin, allowed a decline in house prices after the launch of the renovation program. "At a minimum, prices will not grow, it's already good. As a maximum, there may be some decrease, not a radical one, but, most likely, it will be, "the city mayor told TASS. According to Sobyanin, the implementation of the program will take at least 15 years, and at the peak of its implementation the city plans to build about 3 million square meters. M of housing in addition to the 3 million square meters. M, which are built by private developers. At the same time, the Moscow government plans to sell part of the housing built under the renovation program of the Moscow housing stock.

The experience of resettlement Khrushchev in the 2000s showed that not less than half of the area will be erected not for settlers, but for sale, said Oleg Repchenko. Thus, at the peak of renovation, the volume of new construction can increase to 4.5-5 million square meters. M. "Theoretically, this could lead to the collapse of the market. However, in practice this will most likely not happen. Commercial developers will be forced to reduce activity during the implementation of the program: someone will not stand the competition with the City Renovation Assistance Fund and go bankrupt, someone will slow down the withdrawal of new projects due to lack of demand. Probably, there will be a redistribution of the market in favor of the Renovation Fund at the expense of the share of commercial developers, "the head of the analytical center" Indicators of the Real Estate Market IRN.RU "predicts.

Since 2015, the number of apartments in finished new buildings in the Moscow market from the Third Ring Road to the Moscow Ring Road, where the bulk of the five-story buildings is concentrated, has increased by about 1.6 times. At the end of last year, according to "IRN-Consulting", the share of the finished offer accounted for about a quarter of the primary market.

Earlier, Deputy Mayor of Moscow, the head of the capital construction complex Marat Khusnullin said that the massive construction of houses in Moscow under the renovation program will not lead to a fall or rise in prices for the rest of the housing in the capital. "I can say for sure: prices [for housing] do not collapse. They have nowhere to crumble. Most likely, they will not grow. In the scenario that we are laying on the development of renovation, we believe that the price of real estate [in Moscow] will grow at a rate of 3-4% a year. It will be a fairly stable and predictable situation, "the official said.

The Moscow Housing Renovation Program will affect 4,500 houses located in 85 districts of Old Moscow and six settlements in new territories. Voting of apartment owners in five-story buildings from the preliminary list was launched on May 14 and will last until June 15, 2017.