Is there a pent-up demand in the market of new buildings? Expert opinions

Developers will continue to reduce their portfolios, and consumers will buy or rent housing, according to Novostroy’s interlocutors.

Формируется ли на рынке новостроек отложенный спрос? Мнения экспертов

Maria Orlova, Commercial Director of A101 Group of Companies in St. Petersburg, told reporters that deferred demand is now forming in the primary residential real estate market in St. Petersburg. Whether other market participants agree with this in the context of not only the cultural capital is in this article.

Expert opinions

Grigory Pakhomov, Executive Director of the KNRU Real Estate Agency:

The concept of deferred demand in the real estate market is very common and the government has supported buyers in every possible way so that people can solve their housing issues now. However, due to recent changes in the industry and the introduction of a number of restrictions on mortgages, we can talk about an increase in deferred demand. A number of people are raising funds for a down payment, while others are waiting for mortgage rates to decrease.

By itself, deferred demand is not terrible, but in the current realities, the profit models of developers are such that they put the sale of up to 80% of apartments at the construction stage. If they do not buy today, it means that the developer loses cash flow and after the disclosure of escrow accounts, his profit in the short term will force him to reconsider the business model. Developers need money today, and with deferred demand, they will be available in a while. Inflationary pressures, rising material costs and the postponement of new projects are hitting the industry hard. Not large developers feel this strongly for themselves. At the same time, it is important to pay attention to the fact that demand in the economy adjusts to any changes and it is a matter of time.

The delayed demand factor will last until the key rate is lowered. If we take into account the statement of E.S. Nabiullina, then the opportunity to reduce the key rate should appear in the second half of 2024. After that, we can expect a strong increase in demand for the purchase of real estate.

Asya Levneva, Director of the Marketing and Sales Department of Baltiyskaya Zhemchuzhina CJSC:

It’s no secret that complex transactions and long chains are widespread during the crisis. People change, sell their homes to buy a new apartment or save up for a down payment. The primary market is closely linked to the secondary market. And while high market rates are in effect, the secondary market is practically stagnating. Investors, heirs and other owners of housing for sale simply cannot sell it at the expense of buying a new one. Of course, before the rates decrease, they can switch to the rental market and generate deferred demand. But we have no reason to believe that as soon as rates drop, people will start buying up housing en masse, and this delayed demand will have some serious consequences that are worth discussing.

Demand is declining not only because of the rates. Increased requirements of banks to borrowers, refusals to customers with a high debt burden, an increase in the initial payment, a reduction in the limits of preferential mortgages to 6 million rubles in Moscow and St. Petersburg. The population is heavily indebted. The state is not ready to continue spending so much budget funds on housing subsidies. The inflation rate does not allow for a significant easing of monetary policy. Therefore, only economic growth and an increase in the welfare of citizens can lead to a steady demand for real estate. And in the current conditions, the market will adjust: developers will continue to reduce their portfolios, and consumers, who can, buy housing, and who cannot, rent.

News on this topic on March 1, 2024, the Ministry of Finance wants to reduce the share of housing loans with state support from 90 to 25%. Novostroy asked the experts what the consequences of such an initiative are for the market and what is the optimal share.


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