The real estate market is frozen, prices are falling, new buildings are empty for whole blocks

Рынок недвижимости замерз, цены падают, новостройки пустуют целыми кварталами

Photo: Yuri Smityuk/TASS

New buildings are not for sale at all. Even according to the reports of analysts affiliated with developers, which are heavily embellished, two thirds of the houses built are in dead idle. In fact, everything is 100% – sales offices are closed, and realtors do not even take these objects to work. Since it is useless — the prices are still too high, and the quality of the facilities, especially those that were commissioned this year, is “below the skirting board” — if there is a skirting board itself. Buyers are waiting for a landslide drop in prices, and it seems to be just around the corner. Since the limit of financial stability of developers is not unlimited.

According to INFOLine-Analytics, at least 66 million square meters of ready-made apartments are idle in the Russian Federation, which is 66% of ready-made new buildings. There is another record, that is, an anti—record – the largest volume of unnecessary apartments in the entire history of the modern Russian housing market. Actually, everyone can admire such objects, gloomy neighborhoods of brand-new houses are everywhere nowadays.

A sketch from nature. The near Moscow region, a ready-made quarter, hefty. Near the sales office, it has not been cleaned, and for a long time, virgin snowdrifts have clearly been from the very first snowfalls. There are not even single traces — life has gone from here. There is a banner about discounts, but it is already shabby and faded. It had obviously been hung in the spring, and the colors had faded over the summer.

Moscow, SVAO — the same picture. The sales offices are closed, there are no traces, the blocks are abandoned. In some places, construction has stopped, despite the weekday, it is deserted, the lights are not on, the equipment does not drive. Some kind of zombie apocalypse…

At the same time, discounts on new buildings have even officially reached 30-35%, this is what is declared. In fact, if you shake a stack of bills at the sellers’ noses, you can knock out much more, up to 50%. There have never been similar discounts on the Russian real estate market either. Another anti-record. But whether it will still be.

Everyone is waiting for prices to fall further, but that’s not the only problem. Even those few owners of sums sufficient to buy apartments do not dare to take new buildings.

“Recently they offered a very tasty option, I went to watch it. I’ve been looking for an apartment for a year, I started with a one-bedroom apartment, now I can afford three. Although I didn’t have much money anymore. So, everything seems to be fine, the discount is great, but somehow I don’t want to be the only tenant in the entrance of a huge multi-storey building. It’s scary, that is, frankly creepy. I’ll wait a little longer, especially since prices continue to fall. You’ll see, I’ll buy five—room mansions,” laughs highly qualified IT specialist Alexander.

The fears of a young healthy man are by no means groundless, abandoned high-rise buildings began to gradually fill up with various dubious public. Squatters are the name in the West for those who voluntarily move into empty houses or apartments. It is very difficult to drive out the invaders there, at the “universal people”. But also in It’s not easy for Russia either.

Squatting in the Russian Federation is qualified under Article 330 of the Criminal Code of the Russian Federation “Arbitrariness”: “Arbitrariness, that is, unauthorized, contrary to the procedure established by law or other regulatory legal act, the commission of any actions, the legality of which is disputed by an organization or a citizen, if such actions cause significant harm.”

This harm, as it is easy to guess, still needs to be proved, which is not easy. But in any case, the punishment is extremely lenient: a fine of up to 80 thousand rubles or in the amount of wages or other income of the convicted person for a period of up to six months, or compulsory labor for up to four hundred and eighty hours, or correctional labor for up to two years, or arrest for up to 6 months.

No one ever brought the case to court, the guards stupidly beat the faces of the self-populated hippies and threw them out of their homes. Actually, there were few squatters, since recently newly built residential areas were quickly sold out and populated. Basically, they penetrated into those buildings that, for one reason or another, the authorities did not accept for a long time on the balance of settlements. But there weren’t that many of them.

It’s different now. Firstly, entire cities are idle, and secondly, real estate developers have drastically reduced their staff. These same guards are among them.

And our valiant policemen, in fact, do not need anything. In addition, an extremely confusing system of ownership rights to buildings also plays against the owners of houses.

Various cunning schemes are used to “optimize taxation” and commit other fraud, so the police sometimes refuse applicants because they do not have documents for the property that was allegedly seized. Go prove it first!

Unfortunately, typical squatters in Russia are newcomers. And, of course, no one wants to buy an apartment in the entrance, part of which is occupied by the illegal “Tashkent”, most often associated with ethnic crime. The guards won’t help here, we need riot police. A serious problem that developers generally keep quiet about. It’s like she’s gone. Although it exists, and not only in the capital.

The above-mentioned 66 million square meters are more than a million apartments. Moreover, not all of them are taken into account, those houses that have not yet been completed do not appear here. But, in fact, the figure is greatly underestimated, it is worth talking about the downtime of all 100% of new buildings, that is, 100 million square meters — about two million apartments. Of course, you can’t get enough of any guards on them.

“New buildings are not for sale, period! At all. Everyone can see what discounts are coming to them, how they are increasing. Moreover, the aggressive advertising that they have launched is also playing against developers, these calls to people’s mobile numbers that have already got everyone. “Individual terms of sale”, “individual discounts” and so on are offered. People are not fools, they see that the owners of houses are burning down — and they are in no hurry. And the more actively they try to sell them, the more people will wait for further price drops,” explains private realtor Tatyana Ivanova.

It burns — this is a fact. And it’s not just the aforementioned squatters, this phenomenon has not yet become particularly widespread. While. First of all, huge amounts of money are frozen in the buildings, which the dealers are used to quickly turn around, getting super profits. Secondly, orphaned houses begin to collapse, that is, these assets are devalued. No less a problem.

Developers are “running on the ceiling” and trying to somehow solve their problems, as usual, at the expense of the state. That is, at the expense of us, ordinary citizens. For example, the idea of some apartment buildings has been thrown in, apartments in which will be rented to citizens. However, everything is sewn with white threads, and this feint is unlikely to pass.

Under the influence of some magical arguments, the Ministry of Finance suddenly changed its mind that the “preferential” mortgage should be canceled.

“We are not talking about curtailing the program, but about modifying it. The preferential mortgage program is one of the five preferential programs that exist today. Preferential mortgages were accepted at the time of the so-called anti-crisis response. Today, the program requires modification, and we are considering various scenarios for modifying this instrument,” said Anton Siluanov, head of the financial department.

However, there are doubts that this trick will work a second time. Prices have already gone downhill, everyone realized that real estate in Russia may not only become more expensive, but also cheaper. And buying anything in a falling market, and even in debt, is bad news.

And there is no money.

“The extension of the preferential mortgage program will require additional expenditures from the country’s budget to subsidize rates, now this money is not provided for 2023. Therefore, market participants have fewer and fewer hopes for the extension of the state program. It is very likely that with the completion of the state program, real estate prices will begin to lose weight.” According to our estimates, by 15-20%,” says the commercial director of the financial service “Choose.Yaroslav Bajurak.


Leave a Reply

We use cookies to give you the best possible experience on our site. By clicking "Accept", you agree to our use of cookies.