Realtors predict a decrease in prices for secondary real estate

Real estate market analysts do not rule out a decrease in prices for secondary housing. However, it is noted that a shift in demand from the segment of new buildings can support the market, as mortgages become less affordable

A number of experts predict that the cost of square meters in the secondary market may fall in the coming months. Now this segment is growing minimally only in large cities. Over the past month, apartments there have risen in price by 0.2% on average. These are the data from CYAN Analytics and Yandex Real Estate.

Speaking generally across the country, real estate on the secondary market is already being sold at a discount, said Olga Saukitens, head of sales at the Smart real estate center:

Olga Saukitens, head of the sales department of the Smart Real Estate center, “Prices for secondary real estate will really decrease, because there is practically no purchasing power due to very high mortgage rates. The Central Bank of the Russian Federation has introduced stricter measures regarding the issuance of mortgage loans, now the debt burden on mortgage loans should not exceed 50%. Previously, it was 80% of the income. Accordingly, now the amounts that are issued on mortgages are significantly reduced, and in general the interest rate is high, due to this the purchasing power is low. They buy less, and all this will lead to lower prices in the future. Purchases have been made recently mainly due to mortgage transactions, now almost all transactions are for cash and there are literally isolated transactions on mortgages. The price drop has been going on for quite a long time, it was just, for example, earlier in the form of bargaining. That is, the apartment costs 15 million rubles, a buyer comes and says: I’m ready to take it for 14 million. And the seller agrees, because he understands that there is no better offer. It was already a bargain. Now the bidding will no longer be in the process of negotiations, but in the advertising price. For new buildings, too, developers’ prices will decrease in the near future, because their preferential mortgage is ending and it is becoming more targeted, much fewer citizens will be able to take it. All this will also lead to the fact that developers will have to revise prices.”

Realtor, expert in the rental market, practicing agent Alexander Kharybin, in turn, believes that prices for secondary real estate have already reached the bottom and therefore there is a risk that prices, on the contrary, will go up.

Alexander Kharybin realtor, real estate market expert “In fact, now the secondary market is at the bottom, I believe, and prices will only rise, because preferential mortgages have not been valid for it for a long time. Actually, we have been living with a 17% mortgage for six months, and now we have 18%. If we are talking about the old fund, yes, there is a small correction, very small, by 1-2%, and they are really selling poorly, there are very few calls. But people don’t want to sell cheap, so the market is worth it. If we are talking about new houses, new, good houses in normal locations, over the past six months, prices for secondary stock have increased very much, now there is also a large shortage on the market. I observe that the first stages of commissioned objects that we like, which we select for people, and there are thousands of apartments built, one or two apartments for each building are on sale in the exposition. Accordingly, prices on the secondary market are often lower in relation to new buildings, and people see this and buy for cash. I think that the secondary market is very cheap now, because the mortgage does not apply to it, no one wants to sell cheaper, there are few objects in the exposition. And as soon as the Central Bank starts to lower the rate, they will buy the secondary for cash. Now people keep huge amounts of money on deposits, they write about it, there are trillions there. People are waiting for deposits to stop bringing the profitability that they bring now, and they will withdraw this money, and they will have to invest it somewhere. Where will people take the money? Of course, in real estate. It is difficult to buy a foreign one now, so they will carry it mainly to Russian real estate. It is cash, it is to the secondary market, which is now quite cheap. The balance will be restored.”

In St. Petersburg, secondary housing has already fallen in price by 0.05% over the past month, to almost 220 thousand rubles per square meter, according to CIAN Analytics.

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In Moscow, the average cost is now 337 thousand rubles per square meter. The price tag decreased by 0.1% over the month. Market participants call the purchasing activity in the market low. The number of transactions decreased by 25% over the year.

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