Secondary housing in Moscow lost buyers

The number of deals in this segment is surely falling.
Despite the positive statements of developers and realtors, in Moscow, a difficult situation has developed not only in the market of new buildings, which is threatened with overstocking, but also in the segment of secondary housing. In 2017, the number of transactions in this sector was less than in the year before last. Demand may decline in the future due to the reorientation of buyers to the primary market. Moreover, private sellers from the secondary segment are squeezed out by developers selling out flats that were not realized at the construction stage.

The number of transactions in the secondary market in Moscow in 2017 declined by 1.7%, according to Rosreestra. According to the calculations of the department, last year in Moscow, 123.9 thousand contracts for the purchase and sale of housing were fixed against 126.05 thousand a year earlier. The decline occurred after 2016, when the number of transactions with "secondary housing" increased by 10.7%. Negative trend may remain, the managing partner of "Metrium Group" Maria Litinetskaya forecasts. In her opinion, in 2018 the demand for secondary real estate will be reduced by 2-3%. Against the background of the start of the program on subsidizing mortgages under 6% for customers with two or more children, some buyers will be reoriented to the primary market, the expert notes, adding that for about five years these preferences can be used by about 8 million people.

The supply volume in the secondary market of Moscow is growing, primarily due to apartments in new buildings. According to Inkom-real estate, 3,700 lots (11% of the total supply) were put up for sale in the houses handed over three years ago and later, which is 107.6% more than in December 2016. This trend in Inkom-real estate is explained by the construction boom that provoked a sharp increase in supply in the primary market, and a significant number of buyers-investors who put housing for sale immediately after the delivery of the house. The director of the office of secondary sales of Est-a-Tet, Yuliya Dymova, says that 10-15% of apartments remain unsold before completion, and this factor can further increase the supply. Director of Sales of GC "Granel" Rustam Arslanov also assumes that the next two years against the backdrop of entering the market of new projects, the share of unsold housing in finished buildings will grow to 20%. "The price of finished housing is higher by 3-5%, but it is in demand," he argues.

Director of the secondary market "Incom-real estate" Sergei Shloma is waiting for a decline in the value of real estate in the secondary market. According to him, now the average declared price is 177.6 thousand rubles. for the square. m, for the year the indicator fell by 2.6%. "Analyzing the real budgets of transactions, we see that the average level of selling prices fell by 8%," adds Mr. Shloma. He suggests that the trend in the market will continue in the next 1.5-2 years. Maria Litinetskaya reminds that the starting renovation program can stimulate the price reduction: "If the authorities start realizing housing on a commercial basis and will do it with a lot of dumping, this will lead to a price drop of up to 10% for the whole year." She explains that until now the main advantage of the secondary market was the presence in Moscow of a large number of areas where there are no new buildings, but the renovation of five-story buildings affects almost all these locations. But not all consultants make negative forecasts. The head of the analytical center TsIAN Alexei Popov in 2018 expects an increase in the number of transactions in the secondary market within 10%. He suggests that the recovery will be due to an increase in real incomes and lower mortgage rates.

The decrease in interest in secondary housing, according to Rosreestr, occurred against the background of growth in the volumes of the primary market. In 2017, 54.2 thousand equity contracts were registered, which is 52% higher than in 2016. But some realtors expect that in 2018 the supply in the primary market may exceed the demand 2.8 times, which will lead to overstocking in the market.