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In Russia, sharply increased prices for secondary housing

В России резко повысились цены на вторичное жилье

Real estate prices in the secondary market in Russia increased in the third quarter of 2019 7.4% yoy, and the average price per square meter reached 65.4 thousand — peak mid-2015, estimated by experts “Craigslist real Estate”.

Thus at the end of September, the cost per square meter in Russia amounted to 65 thousand, 890, rising over the month by 0.8%.

As stated in the study, during the year the price of resale properties has increased in all major regions of Russia, the most severely — in Tatarstan (by 14.1% to 47,053 thousand rubles).

Moreover, the prices of apartments in Moscow (10% to 216,8 thousand rubles) is 7 times higher than in Chelyabinsk (30.3 thousand rubles), which recorded the lowest cost per square meter in the secondary market at the end of last quarter.

Experts have concluded that legislative changes and the decline in mortgage rates continue to affect the cost per square meter.

However, the head of the secondary real estate and rent “Craigslist real Estate” Ruslan Zakiryanov not waiting in the future, “sharp increases in the cost per square meter,” since “purchasing power is limited, and what is happening in the market changes are already reflected in the prices for the previous periods”.

We will remind, in August cited data according to which Russians have become less interested in buying a home, and experts do not rule out “new consumer pause on the real estate market.”

The study showed the company “Ingosstrakh” held in cities with a population of 250 thousand inhabitants, not more than 8% of Russians consider for themselves the possibility of purchasing a home, cottage or apartment in the next two years. The residents of other medium and large cities also were less likely to think about buying a home.

Commenting on the results of monitoring, Director of retail business “Ingosstrakh” Vitaly Knyaginichev did not rule out that “today, we stand on the threshold of a new consumer pause on the real estate market.”

As for the buildings, that earlier in September the experts of the international rating Agency Fitch Ratings drew attention to the fact that the new mechanism of financing construction with the use of escrow accounts not fully protect buyers.

As noted in the review by Fitch, “under the new scheme, the risks of unfinished lying on the Bank financing construction, while home buyers who opened it in the escrow account, will be able to withdraw your money in case of problems, the developer or non-compliance with construction deadlines”.

“However, the buyer is the risk of not getting the apartment and losing out on the depreciation for the time until the money was in the account and if the funds was a loan, then all interest paid,” warned the Agency.

In addition, said Fitch, “the situation is compounded by the fact that the buyer has no possibility to choose the Bank separately from the project, as well as independently to change the Bank even in case of problems.”

However, the Deputy Chairman of the government of the Russian Federation Vitaly Mutko, who oversees the construction industry, believes that the transition to a new model of housing Finance was smooth and went according to plan. “Measures for a smooth transition worked. The main thing to macroeconomics was the same, interest rates dropped below this trend persisted”, — said Mutko told reporters.

According to him, after July 1, everything went according to plan, collapses, stops, jump of the prices has not occurred, and that, in the opinion of Deputy Prime Minister, the most important, since the authorities are trying to “maintain stability”.

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