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How much will the price of housing collapse in 2023: forecast of experts on new construction and resale

Date: May 28, 2023 Time: 22:55:50

Experts estimated how much prices for new buildings and second homes in Russia will fall in 2023

Photo: Alexey BULATOV

What will happen to the housing market in 2023? Will there be a collapse in property prices?

The notorious housing problem ruined everyone’s mood last year. Although no, not like this: for three years he has spoiled it. At first, prices skyrocketed in proportion to the number of people who contracted corona. Then they fell in proportion to the number of those who went abroad…

What will happen this year and, more importantly, should prices fall? Many people are asking this question now. Those who have already taken out a mortgage and bought something are not without horror. And those who just go, rubbing their hands.


The year began with the fact that almost all major banks announced an increase in mortgage prices. Now you can take a loan for the purchase of a secondary home at a rate of not less than 12%. And what to expect?

– Price cuts – certainly the vice president of the Russian Guild of Realtors Konstantin Aprelev. – Last year, in Moscow and the region, the price of a secondary property fell by 8% on average. And this trend will continue at least until the fall of this year.

– A huge price bubble has inflated on the market of the Moscow region. The cost of secondary housing in Moscow should return to the level of the beginning of 2020, that is, correct by about 30% from the highs of spring 2022, says Oleg Repchenko, head of the analytical center IRN.RU Real Estate Market Indicators . – Taking into account the price reduction that already took place in 2022, one square meter still has to lose about 10-20%, which may happen in the next 1.5-2 years. In other words, a square meter will become cheaper on average by 1% per month.

According to experts, about the same trends – and in the real estate market as a whole in the country. Prices will also fall by an average of 1% per month, give or take. Although each region may have its own rate of decline. But what you definitely should not expect in the secondary market is a price increase. If you want to sell, don’t hesitate.

The year began with the fact that almost all major banks announced an increase in mortgage prices.

Photo: Ekaterina MARTINOVICH


It is logical to assume that it is time for new buildings to actively become cheaper. But… “With the growth of construction costs, there can be no reduction in prices,” the developers comment. In recent years, due to the pandemic, sanctions, and delivery difficulties, construction materials have gone up in price a lot.

But there’s another side to the coin: Potential buyers haven’t increased their money. However, the new construction market seems to be more prosperous than the secondary. The demand for primary housing continues to be supported by the state. The preferential mortgage for new construction was extended until July 1, 2024, although the rate rose to 8% from January 1 (it was 7%). The family mortgage program for the purchase of a new home is extended to 6% per year: now all families with two children under 18 years of age can receive it.

“However, last year the demand returned to the secondary,” says Konstantin Aprelev. – Traditionally, the ratio was as follows: 70% – resale, 30% – new construction. But since the pandemic, in the context of prime mortgages, it has become 50 to 50. Now, since roughly the fall of 2022, the ratio has become the same: 70 to 30 in favor of secondary housing.

Why? Yes, simply because on the secondary market prices are more actively falling, and you can find more profitable offers at a discount. Who pays a more expensive mortgage.

– In addition, now few are ready to invest in apartments that will be built only in two or three years, and even take a mortgage for this, – says Aprelev. – You never know what can happen during this time.

All this suggests one thing: there should not be a serious change in prices for primary housing in 2023. At the same time, developers, as in 2022, will voluntarily give discounts on some projects.

Developers have other options to meet demand. How is it with the products? There was 200g of butter, it became 180g, the price stayed the same. Something similar happens with the apartments.

– In the coming year, the area of ​​​​apartments in new projects will almost certainly continue to decrease, – predicts Nadezhda Korkka, managing partner of Metrium. – This is mainly due to the low income level of the population. In addition, buyers are becoming more rational and more and more prefer apartments without long corridors and other non-functional elements.

According to Metrium, only from January to November 2022, the average apartment area in new Moscow buildings decreased from 58.3 m2 to 54.3 m2. According to KP’s calculations, this problem is systemic, affecting not only the overcrowded capital but also the country as a whole. For 10 years, the area of ​​​​apartments in new buildings on average in Moscow fell by 33%, on average in the country – by 16%.

– It will also continue the trend to increase the number of floors in new buildings, – says Nadezhda Korkka. After all, the higher the building, the lower the cost of each “square”. By increasing the number of floors, you can keep prices attractive without compromising the quality of the home.

It is logical to assume that it is time for new buildings to actively become cheaper.

Photo: Mikhail FROLOV


The general verdict of the experts is that it will be difficult for the housing market without state support. Some developers who are not the biggest may face serious financial problems. Therefore, the state has nowhere to go – support will be expanded. But since there is no extra money in the budget, this will be done very precisely.

– The family mortgage now applies to all families with two or more children under 18 years of age, which are very numerous in Russia. Residents of the annexed territories have already received special support. They can buy apartments in new buildings with a 2% mortgage, Korkka lists. – The launch of preferential credit programs for young people, state employees and scientists is being discussed. The military mortgage may be reformatted this year. Which is logical in connection with plans to increase the size of the armed forces and can become an additional source of funds for the construction industry.

As the experts suggest, other options are possible. For example, there is talk of co-financing the purchase of a home (for those categories of citizens that the State wants to support especially) by compensating half of the initial payment. Or there is another apartment rental idea: it is being promoted by the Central Bank and the Ministry of Finance. That is, a person is first considered a tenant and pays rent every month. But after having thus paid the full cost of the dwelling, it becomes his property.

– I do not rule out that the authorities finally mature to programs related to rental housing, – suggests Konstantin Aprelev. – Subsidizing rental housing (for example, through housing certificates for workers needed in certain regions or for the military) is much cheaper than the rate of large-scale prime mortgage programs. Especially when you consider that this rate is now growing.

Only numbers.

Photo: Alexey STEFANOV


Will it collapse or not?

Lower the price by a percentage per month, discounts of 10%… Is this really how “bubbles” burst? They are already screaming on social networks: prices are about to fly into the abyss, get ready to buy apartments in Moscow for next to nothing! So should we expect a real price collapse, say, twice in six months?

– Here it is necessary to take into account at least two points, – Konstantin Aprelev calls to think sensibly. – The first moment: before you sell something unnecessary, you need to understand where to put the money later. And now we do not have an option for saving funds that is understandable to the population, comparable in reliability to real estate. And why are people suddenly running out to wholesale apartments for half the price? What will they do with the money they receive? Moment two: 80% of resale sellers live in the apartments they plan to sell. About 70-80% of transactions are alternative: one home is sold, another is bought, a mortgage is taken for the difference in cost. There are very few “pure” buys or sells. Therefore, the market is extremely inert (not subject to sudden changes – Ed.).

To understand the situation, the expert suggests remembering September-October 2022. When the mobilization began, many rushed to sell apartments at 20-30% discounts.

– These apartments were “dumped” by people who left or were about to leave. But it did not last long, – claims Konstantin Aprelev. – Because it soon became clear that with a 10% discount from the market price, the apartment could already be sold in the foreseeable future. So why lower the price even more?

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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