The number of high-rise buildings is growing all over Russia, but it is impossible to buy themphoto: Artem Ustyuzhanin / MSK1.RU
The Russian real estate market is on the verge of crisis: the cancellation of preferential mortgages and the increase in the key rate of the Central Bank have brought down the demand for apartments. Since July 1, two large-scale preferential mortgage programs have been canceled: a mortgage for housing under construction at 8% and a family mortgage at 6%. But mortgage rates at banks exceeded 20%. And developers who have been living happily for years are counting the losses.
Statistics tacitly indicate the crisis situation in real estate. Here are just some numbers.
According to Rosstat data, housing commissioning in Russia increased by 2.5% from January to June 2024, reaching 53.4 million square meters. However, this positive trend is due solely to the increase in residential housing commissioning.
The commissioning of apartment buildings over the same period fell by 28.4%, amounting to only 15.6 million square meters. That is, almost a quarter of all housing in Russia is built by people on their own. But the previous growth of the industry was artificially stimulated by preferential mortgage programs. The benefits ran out — the market collapsed. Details are in the material MSK1.RU .
Russians decided not to buy apartments
At the same time, developers do not even think about reducing housing prices, still blindly believing that people will continue to spend money on unnecessary apartments due to inertia. No, they won’t! According to the portal “Compare.
State Duma deputy Svetlana Razvorotneva hopes that the cost of housing in Russia will decrease. After all, developers will have to sell a huge amount of unclaimed apartments: by the beginning of 2024, according to Dom.rf, 70% of the built housing was not for sale in Russia.
Razvorotneva says that the profitability of construction companies is so high that they have the space to reduce prices. Apparently, if greed allows. If developers, like dogs in the manger, continue to sit with unrealized projects, it threatens to reduce profits and even mass bankruptcy.
There has already been a similar crisis in the real estate market in China. Since the beginning of the 2010s, so many houses have been built here that they simply did not have time to sell it. There are currently between 60 and 80 million unsold apartments in Chinese cities. Many developers who bought plots, but did not have time to start construction, almost went bankrupt. Several major developers, such as Fantasia Holdings, Sino-Ocean, Evergrande Group and Sinic, have defaulted on debt obligations. And across the country, greedy developers have been forced to lower prices. Moreover, it was reduced so much that the government even had to approve the minimum price, which is cheaper than apartments can not be sold. Otherwise, housing would just be given away almost for free.
The perfect storm
Experts called the situation in the real estate market a “perfect storm” when all possible negative factors converged. Will an increase in mortgage rates really bring down the market? We are talking about this with Dmitry Morkovkin, Associate Professor of the Department of Economic Theory at the Financial University under the Government of the Russian Federation.
— Mortgages are still the main factor influencing the demand for housing. Moreover, the penetration of mortgages into the real estate market grew rapidly, — says Dmitry Morkovkin. — If in 2020, during the expansion of preferential mortgage programs, the share of mortgage transactions was only 10%, then by the end of 2023, the share of mortgages was already more than 50%.
At the same time, the problem lies in the fact that many borrowers, in order to take out a mortgage, issued a consumer loan for an initial payment. All this eventually led to the fact that the creditworthiness of the population in June 2024 amounted to about 35 trillion rubles. This indicates not only an increase in the total amount of debt, but also, above all, a deterioration in the ability of citizens to repay debts. You are right that such a situation with loans poses risks both for the population and for the economy as a whole.
— 20% is a psychological barrier, after which people are no longer ready to take out a mortgage. Perhaps that’s why there was such an avalanche-like collapse in the number of new mortgagees?
— The market mortgage rate can now be up to 23%. Of course, against this background, the demand for mortgages on market conditions is rapidly declining. It is more profitable to use client programs from the developer on more attractive terms, for example, by installments. Those who can, are ready to purchase real estate for cash.
Buying residential real estate on a mortgage as an investment project (especially in the secondary market) is becoming less profitable. By the way, I will note that the residential housing market is very underestimated, especially in areas with developed infrastructure.
— But if a person doesn’t have money, he doesn’t care what he can’t buy — an apartment in a high-rise building or a cottage. An alternative would be rental housing, but the rental price is also growing unimaginably.
— There is no optimism here. According to my estimates, rental housing will continue to grow this fall and beyond. And it will grow just because of the mortgage situation. The market rates of mortgage lending at 19-23% per annum for most borrowers are simply unaffordable and prohibitive. This means an almost inaccessible mortgage on market conditions, therefore, those who planned to purchase housing in the near future with the help of a mortgage (with the exception of a small number of preserved preferential programs) will most likely have to postpone the purchase and rent a house.
— And what will rise in price the most?
— The most popular types are studios and studio apartments, which are traditionally in the greatest demand. So for those who already rent apartments, it would be advisable to conclude a long-term rental agreement with the landlord (from 1 year) in order to at least fix the current rental price.
The number of high-rise buildings is growing all over Russia, but it is impossible to buy themphoto: Artem Ustyuzhanin / MSK1.RU
Источник: www.fontanka.ru
English 
Russian 
German 
Polish