After 30 years, the situation has developed again in the primary housing market of large Russian cities, when you can buy an apartment with the funds from a sold premium car
Due to the significant rise in the price of cars, many models are now in the same price category as housing in large Russian cities. And it cannot be ruled out that in the near future the housing market will again encounter practices from the 1990s, according to experts interviewed by the editorial board of RBC-Real Estate.
RBC-Real Estate together with Autonews.ru I found out how much apartments in new buildings cost on average now (according to Domclick) in Russian cities and what cars can be bought for the same money in domestic showrooms (according to car dealers). Experts also recalled that in the 1990s, after selling a car, it was possible to buy an apartment with this money.
The cost of an apartment compared to a car
According to analysts at Domclick, at the end of February 2024, the average cost of an apartment in a new comfort-class building in Novokuznetsk was 12.2 million rubles, which, according to this parameter, topped the rating of large Russian cities. An apartment in Novokuznetsk is slightly more expensive than a new Porsche Macan car, which costs 11.8 million rubles.
Porsche Macan (Photo: Porsche.com )
For a Porsche Macan, you can buy a comfort-class apartment in Sevastopol, for which you have to pay 11.7 million rubles, or an apartment in Moscow, the average cost of which is fixed at 11.4 million rubles.
In Kazan, which ranks fourth in the ranking of cities in terms of the average cost of comfort-class apartments on the primary market, the lot will cost 9.5 million rubles. This is inferior to the cost of the Voyah Passion EV car, the price of which is 9.8 million rubles. For the same car, you can buy an apartment in Tomsk, which costs an average of 9.2 million rubles, and Nizhny Novgorod (9.1 million rubles). For Voyah Free worth 7.9 million rubles, you can buy an apartment in Krasnodar and Krasnoyarsk, where its average cost in February 2024 is fixed at 7.8 million rubles.
Avatar 11 (Photo: Shutterstock)
For 7.5 million rubles, which must be paid for the new Avatar 11, you can buy an apartment in Irkutsk, Omsk and St. Petersburg, Domklik clarifies.
The Mazda CX9 car worth 7 million rubles can be exchanged for an apartment in Yekaterinburg (7 million rubles), and the Aito M7 car costs 6.6 million rubles. — exactly the same as apartments in cities such as Kemerovo and Novosibirsk. For an Exceed RX car for 4.5 million rubles, you can become the owner of an apartment in the cheapest of the major cities — Orenburg, where you will have to pay an average of 3.7 million rubles for a lot, the study says.
How real estate and car prices have changed
Prices for new buildings began to rise sharply after the introduction of preferential mortgages in 2020. If at the end of 2019 the cost of 1 sq. m. m in new buildings in Russia, according to Rosstat, amounted to 71.5 thousand rubles, then by the end of 2023 the price of the “square” has almost doubled — to 140.3 thousand rubles.
The cost of cars is also constantly increasing. By the end of 2023, the average price of new passenger cars in Russia, according to Autostat, amounted to 2.96 million rubles. This is 24% more than in 2022. At the same time, over the period from 2019 to 2023, it increased by about half (four years ago — 1.57 million rubles).
The housing market in the 1990s
Until the 1990s, there was no housing market and no concept of ownership in the country. Everything changed in 1990, when the law “On Property in the USSR” was adopted, and already in 1992 the Federal Law on the Privatization of Housing Stock came into force. Housing could be privatized and further disposed of at its discretion — bequeathed, donated, sold. This is how the institution of property and the real estate market began to form in Russia.
In 1990-1992, a popular advertisement in the newspaper Vechernyaya Moskva was: “I’m changing my room for a car.” Quite normal housing was offered for exchange, and the car meant “Zhiguli”, recalls Sergey Shloma, head of the Secondary Market department at Inkom-Real Estate. According to the expert, the real estate market in our country was just beginning to take shape at that time, the process of free privatization of housing was underway. Apartments from the owners began to appear on sale, but the property was extremely undervalued, Shloma adds.
In the 1990s, foreign cars on the streets of Moscow became a frequent occurrence (Photo: Alexander Katkov / TASS)
Personal experience
Roman Diakonov, businessman:
in 1990-e years, I was engaged in the automobile business, overtook to Russia from Germany cars. Audi, BMW and Mercedes in good condition cost at least $20 thousand on the market, they were bought mainly by wealthy people who already had their own homes. But one day I was offered to buy an apartment on one of the outskirts of the south of Moscow. Its price was very tempting — $ 18 thousand. I didn’t have such free money, but my business at that time helped me. I drove a Mercedes car from Germany in excellent condition and in a very good configuration. I bought it for $8 thousand, and sold it for $ 25 thousand to a buyer who wanted just such a complete set of the car. Thus, I earned $17 thousand on the resale of the car and, adding $ 1 thousand to this amount, I managed to purchase that apartment. But this was the only case in my practice, I did not buy more apartments after the sale of the car.
A new Volkswagen in a good configuration in the 1990s cost at least $ 15 thousand. For that kind of money, you could buy a one-room apartment in a residential area of Moscow (Photo: Valery Khristoforov / ITAR-TASS)
An apartment for a car in the 1990s
The products of the automotive industry in the mind of the former Soviet man were repeatedly overestimated, Sergei Shloma believes. At the same time, the value of real estate was underestimated by many in the 1990s. That is why such transactions could arise when a person sold an apartment and bought a car, the expert adds.
For example, in 1994, a BMW 3 cost about $24 thousand, which corresponded to the cost of an apartment in the Maryino and Biryulyovo districts, recalls Oleg Repchenko, head of Real Estate Market Indicators. According to him, there have been transactions to exchange an apartment for a car and vice versa, but still rarely. “If you compare housing with cars, then you should focus on comparable market segments. Then both economy class cars and luxury brands will cost much cheaper than apartments of the corresponding class,” the expert explains.
In the second half of the 1990s, the average cost of an apartment in a residential area was about $ 15-20 thousand. And in the late 1990s, when the country slightly moved away from the consequences of default, the cost of such an apartment was $25-30 thousand, which at the then exchange rate was 700-800 thousand rubles, recalls Marina Zaitseva.
“This is the cost of a non-premium, but quite good foreign car. In my practice, it was the exchange of an apartment for a car or vice versa that did not occur, but some colleagues dealt with such transactions. And in light of the sharp rise in the price of good foreign cars, it cannot be ruled out that in the near future the housing market will again face the practice from the 1990s,” the expert believes.
Prices in dollars
One of the distinguishing features of the housing market in the 1990s was that prices were only in dollars. There were no statistical data on prices at that time, they were often assigned simply “from the head”. This led to the fact that approximately similar apartments, which were located in the same area or even on the same street, were sold for completely different amounts, says realtor Marina Zaitseva, who began working in the housing market in 1993. According to her, the price is 1 sq. m. The price started at $200 if it was a question of residential areas. In the center, housing cost about three times more expensive.
But still, compared to current prices, those amounts were ridiculous, says Zaitseva. For example, a two-room apartment in an ordinary house on Kutuzovsky Prospekt could be purchased for about $45 thousand.
Already in 2002-2003, housing prices increased by about one and a half times. And over the years, the average cost of an apartment, for example in Moscow, has increased, if you count in dollars, to $ 190 thousand, the expert adds.
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