The secondary housing market in the country is saturated with offers, but Russians are in no hurry to buy ready-made apartments at market mortgage rates. With the advent of subsidized mortgage programs and marketing “undermortgage” from developers, the attention of the buyer is focused exclusively on the market for new buildings. Low rates and more comfortable monthly payments have played into the hands of developers.
The secondary segment of the domestic housing market continues to demonstrate the development of a real market situation, where, following the stagnating interest, the cost of a “square” is slowly and reluctantly declining.
The incomes of the population do not allow providing the proposals of the owners with the required level of demand, and for each real buyer one has to fight with discounts. At the same time, experts consider the current prices for the “secondary” to be too high, but the sellers do not want to lose profits, and therefore they are reluctant to lower prices.
Demand in the market of secondary apartments is minimal
Prices for secondary housing continue to be high, the Associate Professor of the Basic Department of Financial Control, Analysis and Audit of the Main Control Department of the City of Moscow of the PRUE them. G.V. Plekhanova Svetlana Kovalenko. The reason, oddly enough, is the increase in the cost of housing in new buildings.
Apartment owners raised prices for their objects following the increase in the price of square meters in new buildings. However, the ready-made housing market did not have the necessary financial instruments to stimulate the interest of buyers in the face of rising prices.
“As part of the forecast expectations, it can be assumed that the demand for secondary housing in 2023 will decrease by 3-5%, unless external circumstances arise that will have a significant impact on the real estate market and lead to a more significant decrease in demand,” Kovalenko clarifies.
The volatility of the decline in demand, according to her, will be due to the fact that a sufficiently large number of mortgage loans were issued in the period from 2021 to 2022, and the debt burden of borrowers has formed.
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There is no money, but there will be no more discounts on the secondary market
The situation on the secondary market is aggravated not only by the lack of demand, but also by the unwillingness of sellers to go for discounts. When it is not possible to sell apartments at the desired price, the owners prefer to withdraw them from sale. As an alternative, they offer their space for rent.
– Pricing policy in the secondary market is more flexible than in the primary one. The mass departure of citizens abroad due to the departure of foreign companies and the complication of the geopolitical situation has led to an increase in cheap supply in the secondary market. But this trend will not last long. Many sellers will choose to rent or freeze items until better times to avoid selling at bargain prices. But it is obvious that even now the secondary market is seriously competing with the primary market, Levneva believes.
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What will happen to prices in the secondary housing market in Russia in the spring
Experts are reluctant to share forecasts on the state of the secondary real estate market. Now the situation on the market is determined not only by economic rules, but also by the behavior of people, the actions of the state.
Most likely, the owners will try to keep prices at the same level. Since the beginning of March 2022, supply has doubled, demand has fallen by about 35%, and prices are reluctant to decline.
– The price will continue to fall until the balance between buyers and sellers is evened out. As long as there is such a huge amount of supply in the market, I think prices will continue to drop. In the spring, the price reduction will definitely continue, – Andrey Garifullin, Deputy Commercial Director of the largest IT platform for booking apartments Nmarket.PRO, shares his forecasts.
This decline, Svetlana Kovalenko adds, will be very smooth and reluctant, as sellers do not want to give up positions according to the already formed price criterion, and price monitoring at different locations in Moscow confirms this fact: for February 2023, prices on the secondary market for individual monitored locations in principle remained at the same level or changed very slightly by 100-200 thousand rubles. from the total cost.
– The real estate market is inertial. And he is characterized to a greater extent by the waiting position of the seller and the buyer. But, in our opinion, prices for secondary housing will tend to “smooth” decrease, and for the spring period, we can assume a decrease of 5-6%. And over the next six months, prices may fall by 9-11%, the economist predicts.
But the executive director of the Moscow Investors Club Vladislav Preobrazhensky, on the contrary, believes that the secondary market is in an equilibrium position: the price of finished housing will change following significant events in the economy. In his opinion, a balance of supply and demand has now been achieved. If new incentive programs appear on the primary market, buyers will prefer an apartment in a new building.
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