The Moscow real estate market has responded to the affordable mortgage growth in deals and a fall in prices

For 7 months of this year, the secondary housing market in the Russian capital increased by 25% in deals, and the primary market by 37% compared to January-July 2017.
For seven months in 2018, Moscow registered 53,617 equity agreements, for the same period in 2017 - 36,367, 47% less, Rosreestr reported. The record set in July: 8570 contracts, 14.5% more than in June, and 64% more than in July 2017.

After almost three years of stagnation, the secondary market also began to grow: 81,482 deals were registered since the beginning of the year, 25% more than in the seven months of 2017 (64,900).

Cheaper credit

The growth in the number of transactions is due to the availability of mortgages, says the head of the portal Oleg Repchenko. Confirm his opinion and data Rosreestra: mortgage transactions since the beginning of the year in Moscow registered 46 562, 74.5% more than for seven months in 2017 (26 690). "Throughout the first half of the year, we witnessed a real mortgage boom, we have not seen such large indicators on deals involving a loan," confirms Sergey Shloma, director of the secondary market department of Incom-Real Estate. Until the end of 2017, mortgage rates in the secondary market were around 14%, and now, after a sharp decrease in the key rate - about 10%, Repchenko points out.

Activity in the market of new buildings is largely connected with the availability of mortgages, says Dmitry Taganov, head of the analytical center "Incom-Real Estate": the average rate is now 9.6%, the psychological barrier in 10% is overcome.

Cheaper property

After the crisis of 2014, the secondary market actually stagnated. Over the past three years, the price has fallen by about 20% in rubles, Repchenko points out, since the beginning of the year prices have stabilized a little - the decline slowed down. The average price of 1 square. m sold in the secondary market of Moscow facilities, according to GC Miel, in July 2018 amounted to 172,800 rubles., and in July last year - 173,400 rubles.

Up to 90% of transactions in the secondary market occur with the use of mortgages, and only those that are cheaper than the market are sold, the private broker points out. "Activity is largely related to the implementation of deferred demand, which was formed in 2015-2017," says Marina Tolstik, Managing Partner of Miel Real Estate Offices. "But the reason is not in the growth of real disposable incomes of the population, but in lowering mortgage rates." Repchenko agrees with her: "If in the past years activity on the market caused revenue growth, now the situation is reversed - the market has become more active because prices began to fall and the mortgage fell in price".

The average term of exposition in the secondary market increased in comparison with the previous year - the share of apartments that have been exhibited for more than a year is growing. Owners of such apartments are forced to reduce the price. The average discount in July, according to the GC Miel, was 4.8%. And for the most liquid objects - 55% of the apartments sold - the exhibition takes less than 90 days to make an advance payment.

Compared to seven months in 2017, the offer on the secondary market decreased by 23.9% to 25,542. One of the main tendencies of this year, related to the proposal, concerns the cheapest objects - in the conditions of increasing demand they are quickly washed out of the exposition. The share of the most budgetary proposals in the secondary market (up to 5 million rubles.) Since the end of 2016, when it was 7% (the maximum in the previous four years), declined to 3% by the spring of this year, Shloma points out.

New buildings are growing

A noticeable increase in prices in the secondary housing market is hampered by strong competition with new buildings, Shloma believes. Due to amendments to the law on shared construction, developers until July 1 actively received construction permits. In Moscow, on July 1, 2018, permits for construction were issued of approximately 39.4 million square meters. m of housing - with an annual entry of about 3.5 million square meters. m.

A record number of new buildings are entering the market, and less is being bought than is being built, Repchenko points out. The supply in the primary market exceeds demand by more than 2 times, but the imbalance is gradually beginning to decline, Maria Metinium managing partner Maria Litinetskaya says. 97% of new buildings are offered at a discount, but only 62% of discounts are announced, in other cases discounts are provided on an individual basis, Litinetskaya knows. The maximum discount in the mass segment was 28%, in business and premium class - 30%, in the elite segment - 29%, she says, however, this applies to the least liquid apartments.

On average, the discount is 5%, says Natalya Shatalina, general director of Miel-Novostroikek, customers can be offered additional personal bonuses, for example, if the client is ready to pay the whole amount at once.

On average, the price of primary housing is about the same as last year, but there is a tendency to increase the price, said Taganov of Inkom: the market is gradually washing away low-budget proposals. In the segment of the standard in the territory of the new Moscow, the offer price is 3.7 million rubles, which is cheaper than the same apartment in the Moscow region - 4 million rubles. In the comfort class, the situation is reversed: in the new Moscow - an average of 5 million rubles. In the suburbs - 4.2 million rubles.

Will it be cheaper

"Citizens are waiting for further rate cuts. In vain. Because of the new US sanctions, we can say that the Central Bank's key rate will not only not decrease, but it will most likely increase, and the mortgage interest will not decrease, "Taganov predicts. "July showed that the mortgage boom seems to be coming to an end. Most buyers who delayed the purchase in anticipation of lower rates have already entered the market, "Shloma believes.

"The market is already in a fever - buyers expect a deterioration in the economic situation, almost the onset of hard times. And when people lose confidence in the stability of their financial situation, they in a natural way postpone the purchase of real estate, "Shloma states.

Litinetskaya does not agree: the depreciation of the ruble always stimulates a quick decision on the deal. She predicts that in the short term, the secondary market may rise in price by 1-1.5%. Shloma believes that demand in the secondary housing market will weaken and the number of transactions will decrease.

As for new buildings, in the coming months, new facilities will enter the market. This means that a new wave of price reductions is coming - both in the secondary and in the primary market, Repchenko is sure: the bottom will be reached by 2020-2021, prices for this time may fall by another 20%.