Against the background of crisis phenomena in the Russian economy in 2017 was not the easiest to suburban housing market of Moscow region. What were the main difficulties? And then expect the buyer this year?
The situation is not simple
Statistics of the real estate market in Russia in 2017 was not very encouraging. Was no exception and suburban real estate of Moscow region. Following the Russian economy, this sector faces serious challenges. The primary segment is characterised by low development activity and supply shortages, as with the collapse of the ruble against the dollar a few years ago, construction and building materials, which the developers purchased abroad, have become too expensive. Not many better things in the secondary segment, where forced to leave the buyer due to the shortage of supply in the “primary”. Many houses built in 2000-x years outdated on a number of parameters and no longer satisfied with modern buyers. Added to this is the low purchasing activity, because the money from the Russians from-for crisis became less.
According to managing partner “MIEL-Country real estate” by Vladimir yakhontova, country market 2017 was almost a “carbon copy” of 2016. One of the main changes was the adjustment of prices by the sellers to decrease. Since the exposure time of the suburban real estate is quite large, the content of the object (except for land) requires constant investment of time and money, owners are beginning to cut prices.
The average discount rate on the secondary market of suburban real estate amounted to in the year 2017 10%, says the managing Director of brokerage Department of “MIEL-offices of real estate” Alexander Moscato. This is more than in 2016 (8%) and in 2014 (6%).
Vladimir Yakhontov emphasizes that brand new development projects in the market. There are those that were planned or funded before, during 2014-2015, the Pace of development very slow. Many of the projects of cottage building developers today deliberately frozen “until better times”, even at the stage when already the roads and networks due to the low potential demand.
The real estate market statistics
As told the head of the Analytical center “Inkom-real Estate” Dmitry Taganov, in the end of 2017 in the country market of Moscow region was sold 65 631 lot. A year earlier the figure was 69 354 lot, then there was a 5% increase. Now the plots without a contract (UBP) account for 67% of total deals, low-rise construction 15%. Townhouses and duplexes within an 11% range, houses 7%.
At the same time in 2017 to the countryside market of Moscow region there were 67 cottage settlements, 76% of which that is, 51 the village was not built up. The declining trend in the number of new projects is noticeable. In 2016, appeared on the market 81 the village, 70% of which was represented by UBP in 2015 and 2014 the number of new settlements was equal to 118. In 2015 the building was not in 71% of them, and in 2014 70%.
According to Dmitry Taganova, in just 2017 on suburban country market there were 12 709 deals, which is 15% less than 2016, when it was sold 15 005 object. 50% of sales accounted for UBP, 29% of the realized demand of apartments in the “low-rises”. For 9% of transactions fell on the houses. Duplexes chose 3% of buyers.
However, in the near suburbs statistics for UPB is somewhat different. If earlier the share of plots in the structure of trades, the average was 60%, now this figure dropped to 37 to 43% depending on the season, says Vladimir Yakhontov. Land plots here are less willing to buy because the cost of the finished buildings (both primary and secondary market) is already slightly higher than the cost of self-construction on the purchased plot.
Note that the largest number of transactions occurred with entities located at a distance of from 10 to 30 km In this area had 50% of all transactions. The fifth part of the demand is a deal with the suburban sites in the area of 30-50 km from Moscow ring road. 15% in the structure of demand occupied properties in locations up to 10 km from MKAD between 50 and 100 km Over 100 km from Moscow bought a house 4% of buyers.
According to the experts, in the market there is a certain imbalance between demand and supply. Despite the fact that sales are concentrated areas, customers increasingly want ready-made home.
Conclusion for sale by developers UBP due to economic difficulties they had to face in times of crisis. We can say that many developers tried to go the path of least resistance, abandoning the costs for the construction of houses. However, here they may be disappointed. The fact is that is simply sell the land is extremely difficult because today’s customers pay attention to prices, but also the willingness and the saturation of the infrastructure. Even if the buyer is willing to buy just the plot, which then will himself to build a house, to make it agree at the lowest possible cost in view of the forthcoming costs for the installation of communications, their connection, building a house and so on. If the land is located in the cottage settlement, buyer will require further improvement (this could include walking areas, alleys, landings, beaches, etc.).
As for trends, the traditional preference for him for many years. In “MIEL-Country estate” said that the most popular are the Western districts of the Moscow region, which together account for 50% of all transactions with the suburban real estate. The leaders are Minsk and Mozhayskoe shosse, Kiev and Kaluga, as well as New Riga and Volokolamke.
Next in popularity followed by Novoryazanskoe and Egorievsk highway, which collectively account for 11% of demand. They are followed by the Yaroslavl highway (9%), dmytrivka (6%), Gorky and Kashirskoe shosse 5%, Pyatnitskoe and Shchelkovo 4%.
Summarizing it can be noted that the overall situation in the country market of Moscow region fits into the overall crisis the statistics of the real estate market of Russia.
Developers do not lose heart
Despite all the gloomy statements of analysts, head of Department of sales of the company Optiland Alex Odnoral says that in the past year has witnessed several trends that contributed to the recovery of demand. In particular, increased the number of mortgage deals has changed the average age of the customers. In addition, in the fourth quarter, buyer activity has increased significantly. At the same time increased the number of transactions with those customers who initially were inclined to buy a city apartment, but chose for permanent residence, this housing format, like a townhouse.
As told in Optiland, in the first quarter of 2017 rural property used traditionally in low demand. In the second quarter of last year, there have been positive dynamics, the activity of buyers has started to increase. In III and IV quarters of every month in the villages of Cambridge and Marseille occurred in 10-20 deals. Moreover, the highest demand was in October, when they managed to sell 15 objects, and November, when it was done 19 deals. Compared to the same months of 2016, the figures increased significantly by 73%.
Despite difficult times for the country building, “Ross Rakenne SPb” (Honka) 2017 has been quite successful, says marketing Director of Moscow office of Anastasia Fetisov. According to her, during this period, new projects, and continued construction of the settlement “Zavidovo HONKA”. Also, construction began on the Vazuza Country Club 56 homes and Lake Club on 14 homes. In 2018, the company will introduce a few new settlements in Moscow and Leningrad regions.
At the same time in Honka note that in recent years the company’s customers were more likely to give up a lot of footage. This is mainly due to a reinterpretation of the concept of home customers. For large buildings it is quite difficult to maintain, while on the melon time for the customer comfort is key, the rationality and functionality of the house.
The future is bleak?
And yet, despite the success of individual developers, General Vladimir Yakhontov does not expect changes in the market in 2018, because of his apparent conservatism. Analyst predicts recovery of not more than 10 new high-quality projects in the first half of the year.
According to experts “MIEL-real estate office Network” in 2018 the cost of the average ticket purchase will decrease in all segments of the suburban real estate on the background of increasing supply. The purchasing power of Russians still remain low, while sellers will put more sentences in connection with a material tax burden. Bargaining over objects will make more than 10%, and in some of them reaches 30%.
However, within three years positive changes segment can occur after the abolition of shared construction, predicts Vladimir Yakhontov. In particular, to market multi-storey housing developer will have experience in the building not less than 10 000 sq m In the future for the developer can be a convenient way for construction of townhouses with a further transition to a multi-storey city building.
Thus, the suburban real estate market is experiencing a serious crisis of liquidity proposals. In General, the quality of housing is not much in both the primary and secondary segments. The situation is forcing sellers to reduce prices. Otherwise, to realize the object very difficult. This year significant changes can be expected, although after a few years the situation may change for the better.