29.09.2022

Apartments have risen in price by 25% over the year. Will a housing crisis await us?

In Novosibirsk, due to the pandemic and preferential mortgages, housing has risen in price. Affordable mortgages first pulled inflated prices for new buildings, and now for finished housing

Affordable mortgages have played a cruel joke, first allowing Russians to buy dream apartments that they previously could not afford, and then inflating prices for new buildings. At the beginning of 2021, even the president noticed the imbalance in the market and instructed him to figure out how to level the situation.

In the meantime, secondary real estate has pulled up behind new buildings. Liza Pichugina found out how the prices have changed, why and what these price races will lead to.

How prices jumped

At the end of March, Zhilfond summed up the dynamics of prices in the secondary housing market for the year – almost from the beginning of the pandemic, from February 2020 to February 2021 inclusive. And if there was talk about a noticeable rise in prices for new buildings at the end of last year, then the growth rates of the secondary housing were somewhat unexpected.

According to Zhilfond, the average cost of 1 square meter of housing in the secondary market increased by 11% and amounted to 79 thousand rubles (against 71 thousand rubles a year ago). At the same time, the average transaction amount increased by 17%, and the prices for kopeck pieces and three rubles rose the most: by 24.5% and 25.5%, respectively. Moreover, in March 2021, prices for two-room apartments added another 1.5%.

And only since the beginning of this year, the cost of apartments in advertisements has risen by 6.5%, according to the agency’s analysts: from 78 to 83 thousand rubles per square meter.

The Central Real Estate Agency confirmed the growth, but the specific figures were not so frightening. According to the company, according to the results of March 2021, one-room apartments have risen in price by 17% compared to last March, and two-room and three-room apartments – by 15%. Both companies emphasize that the data relate only to the final cost of the apartments for which the transactions are concluded.

– The data on the price is quite plausible, we also have an increase: if you count February 2021 to February 2020, it turns out 10.9%, – Elena Ermolaeva, director of RID Analytics, confirmed the overall results of the year.

“People are terrified of prices”

All experts unanimously point out one single main reason for such a rise in prices – preferential mortgages for new buildings. Since the launch of preferential mortgage lending programs, prices for new buildings have grown very quickly, and over the year the growth has reached 15%, while the cost of apartments in the secondary market has hardly changed, Elena Ermolaeva noted.

– And suddenly affordable housing began to turn into inaccessible even with low rates due to rising prices, even at low rates, it became unprofitable to buy new buildings. People are already simply horrified by the prices: at 130 thousand per square meter, there are even proposals for 168 thousand per square. Novosibirsk has never seen such prices in history. At the same time, on the secondary housing, which was left without attention, the low cost of a square was preserved, and the supply increased. This made it profitable even at higher rates: the amount of the principal amount is less, which means that the payments are lower, – explained Igor Zelensky, managing partner of Macromir in Novosibirsk.

The change in the focus of buyers slowed down the rise in prices for new buildings, but pushed forward the apartments ready to move. Moreover, for example, if this year the cost of housing under construction has grown, according to RID Analytics, by 2.4%, then secondary housing has grown by 4.1%.

Igor Zelensky compared the situation with 2006, when, after amending the legislation, the mortgage for the first time became a mass product.

– I remember how I wanted to buy a one-room apartment for 375 thousand rubles in order to rent it out, but did not buy it, and the explosive growth of mortgages, which generated a huge amount of demand in the market, raised the cost of this apartment to a million in a year, – recalled the expert of Macromira “.

Director of the Academy of Sciences “Quadrotek” Vladimir Golovanov characterizes the situation as unhealthy: according to him, if the rise in prices is tens of percent, it looks more like a panic. The agency observed situations when sellers disrupted deals, noticing a rise in prices on the market: they took deposits, signed preliminary contracts, and then terminated them, deciding that they were selling their apartment too cheap.

– This is something from the field of sociology: people make decisions under the influence of emotions, not economic weighing, – said the director of “Quadroteka”. – The bubble is swollen, it is obviously unnatural. This rate of rise in price will lead to a painful trend reversal. Such phenomena just don’t go away – it’s like after a good party: no matter what you eat, your head will still pop.

Price hangover

According to Vladimir Golovanov, at first the secondary market won back the forced freeze at the time of the rush demand for new buildings, and now it is compensating for the lag with might and main. But the completion of preferential mortgage programs, which is tentatively scheduled for July 1, 2021, could make a difference.

“In the future, much will depend on the tactics of the Central Bank and government decisions: whether serious measures will be taken to support the economy in 2021, what will be the inflation rates and the volume of the ruble emission,” agreed Oleg Vonarkha, head of the Zhilfond office.

The Zhilfond also noted that it is possible that preferential mortgages may be phased out in regions with the highest demand, which include the Novosibirsk region. This could lead to a warming up of the market by July and a sharp decline in demand – after.

Igor Zelensky, in turn, noted that affordable mortgages awakened investors who had been sleeping for several years in a row, who had withdrawn funds from deposits that had become unprofitable and invested in apartments under construction.

“Those who bought housing in the summer, at the beginning of autumn and before the new year have earned their margins, the market has risen quite high, and now they will start selling,” the expert said. – Many houses are already on delivery, which means there will be a blowout. This will halt the rise in prices.

At the same time, prices can stagnate, moving quite a bit in one direction or the other, for quite a long time – for example, until the income levels of Russians catch up with prices and the mortgage rates inevitably increased after the increase in the key refinancing rate.

At the same time, experts do not believe in price reductions: they can only roll back where the sellers, in a kind of euphoria, lifted them too high, says Vladimir Golovanov. Despite the fact that last year mortgages became available even to those who previously had no access to them and who are unlikely to be able to fully service such a loan, a repetition of the situation of the USA in 2008 is not expected in Russia either. According to experts, we are coping with the economic recovery after the pandemic much better than Western countries.

2020 will be remembered by the real estate market not only for the consequences of the pandemic, and the pandemic affected not only prices: the market participants themselves spoke about the most important events of the NGS.

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