For the first time since the beginning of the year, average prices in Russia on the secondary real estate market have gradually begun to fall. As reported by the federal company Etazhi to KP.RU, the average cost per square meter in the country fell by 0.7% compared to June. It’s not a collapse, of course, but still…
This is true, however, not everywhere. In Moscow, prices on the secondary market set the pace. For cities with a population of more than a million, the situation is as follows: the cost of secondary square meters is growing, or at least not decreasing, in Samara, Kazan, Nizhny Novgorod and Chelyabinsk. In the rest it is falling.
“Some owners have reduced the price of their properties in the competition for buyers,” says Ildar Khusainov, director of the federal company Etazhi. “First of all, these are low-demand properties or cases where the owners are interested in urgent sales for one reason or another. Owners of liquid (i.e. “hot” – Ed.) properties are in no hurry to reduce prices and often prefer to rent out their apartments without taking them off the market.”
At the same time, the number of transactions on the secondary market in July… increased by 19% compared to June (although it fell by almost 18% compared to July last year).
This has already given rise to rumours that the price drop, although it has barely begun, will end immediately.
Owners of liquid real estate are in no hurry to reduce prices and often prefer to rent out their apartments without taking them off the market.
Photo: Shutterstock.
“Pent-up demand played a role when, against the backdrop of a new increase in the official interest rate, everyone who had been approved for a mortgage to buy a finished home and was looking for options rushed to close the deal,” explains Ildar Khusainov.
In other words, until almost the end of July, buyers with an already approved mortgage were still hopeful: maybe they could “wait it out” and there would be better conditions on the market? But when the central bank raised the key rate from 16% to 18%, “insiders” got scared and rushed to close deals. We go through something similar every time the central bank raises rates.
So what to expect next?
“Potential buyers will now be increasingly attracted by options with the maximum discount – their market share has increased and the discount can partially compensate for excessive loan payments due to rising mortgage rates. Russians are increasingly understanding this and therefore are increasingly considering such purchase options with a view to refinancing the loan in the future,” the expert believes.
We translate from real estate language into a language that everyone can understand. Don’t try to figure out where things have risen in price by half a percent and where they have “officially” dropped in price by a third of a percent – these are offer prices, i.e. the “wishes” of sellers. Don’t wait for a visible “collapse”. Negotiate! More and more apartment owners will be forced to offer good discounts, commensurate with the rise in mortgage prices.
