Forecast for suburban real estate for the year. Moscow housing prices could fall sharply
In 2017, prices for secondary apartments in Moscow continued to creep down against the backdrop of a decrease in effective demand and under the pressure of a huge supply of new buildings. But, most likely, the square meter would have lost a lot more if not for the mortgage, the rates on which fell to a record low.
According to think tank www.irn.ru, in 2017 the ruble index of the cost of housing in the capital decreased by 1.7% and at the end of the year averaged about 167,000 rubles. per square meter. However, in addition to the obvious decrease in the cost of a meter, which reflects the dynamics of the declared prices, there is also an implicit one - due to discounts and bargaining. Sales prices(based on the results of real transactions) fell by about 7-8% over the year - see "Apartments in Moscow and Moscow Region in November-December 2017".
It should be noted that the real estate market was greatly helped by the record decline in mortgage rates. Let us recall that due to the decrease in inflation and the key rate of the Central Bank, mortgages for the purchase of finished housing by the end of the year fell in price by about 10% per annum. For comparison: a year ago average rate the issuance of mortgage loans in the secondary market accounted for almost 13%.
Most likely, if it were not for the mortgage, the price drawdown would have been more significant, closer to 10%, because a decrease in the interest rate on loans increases the solvency of potential buyers and makes housing more affordable.
How much can be calculated using the mortgage calculator at www.irn.ru. At a rate of 13%, down payment 20% and a 15-year loan term a monthly payment for an apartment worth 8 million rubles. will amount to almost 81,000 rubles. Because monthly payments on a loan should not exceed 50% (or better 30%) of the borrower's income - these are the requirements of banks, at such a rate, the mortgagee should receive more than 160,000 rubles. per month. And at a rate of 10%, the bank will have to pay about 69,000 rubles. a month, and required level income is reduced to 138,000 rubles.
In terms of housing types, most of all, by 6.5%, the most expensive segment - monolithic brick houses, where most of the business class offers are concentrated, fell in price. The markdown of high-budget real estate is “catching up” in nature. The fact is that, unlike the economy class, which has been falling in price since 2015, prices for expensive housing have demonstrated phenomenal stability for a very long time. For example, at the end of 2016, monolithic brick lost less than 1%, and the old panel lost almost 7% (see "Real Estate Market Review at the end of 2016").
However, as IRN.RU has repeatedly warned, the stability of prices for expensive real estate is apparent: the high-budget segment always resists changes in economic realities for a longer time, but in the end it is no less cheaper than mass housing.
It happened this time too. By the middle of 2017, the owners of overvalued apartments, who had not received buyers with pre-crisis budgets in two years, began to massively remove real estate from sale. And, as a result, by the fall, prices in the expensive segment went down at an outstripping pace (see "Real Estate Market Review at the end of August 2017").
At the end of 2017, brick five-storey buildings showed themselves best of all - they were the only ones in positive territory, albeit a small one (1.2%). Apparently, this segment has become the main beneficiary of the dilapidated housing renovation program launched by the Moscow authorities. At the same time, the renovation could not pull the panel Khrushchevs into the positive zone - they lost 2%. The multidirectional price dynamics of two similar, at first glance, segments is explained by a tangible difference in the quality of housing - after all, new apartment if they do, it won't be soon, but wait for the move to brick five-story building much nicer than a panel one.
However, the fall in the declared prices for "khrushchob" was still partly slowed down by the hype around the renovation - other types panel houses have fallen in price more.
Along with the brick five-story buildings, a little better than the market in 2017, stalinkas and typical brick houses looked. The main advantage of the segment is its good location: such houses are usually located relatively close to the center, close to metro stations.
All the above trends are reflected in the price dynamics by geography. According to the results of 2017, the most expensive districts were among the outsiders of the market: Central, Zapadny, Yugo-Zapadny. Better than them, but worse than the market on average, are the ecologically unfavorable and remote from the center Southern and South-Eastern districts, mainly built up with panel housing. And democratic districts with a large number of brick five-story buildings and / or stalinkas - North, East, North-West - emerged as leaders.
A similar picture emerges when considering the dynamics of prices for rooms. Large and, therefore, expensive apartments - multi-room and three-room apartments have fallen in price the most. Prices for "odnushki" (there are many of them in five-storey buildings) decreased by only 1%, and "kopeck piece" apartments went to zero - this is the most popular option among family buyers.
According to the market research of the residential real estate market in Russia, carried out in August 2017 by BelBusinessConsulting, in 2016 the volume of housing commissioned in Russia amounted to 80.2 million square meters. m, which is 6.0% less than in 2015. The largest decrease in commissioning is observed in the segments of individual residential buildings, dormitories and multi-apartment low-rise block buildings. At the same time, there is an increase in the construction of economy-class residential buildings.
The largest volumes of housing commissioning in 2016 in absolute terms were recorded in the Moscow Region, Krasnodar Territory, St. Petersburg and the Republic of Bashkortostan. Least of all housing in Russia in 2016 was commissioned in the Murmansk region, Magadan region and Chukotka autonomous region- in these regions, housing commissioning did not exceed 100 thousand sq. M.
The total area of residential premises per person in Russia on average amounted to 24.5 square meters in 2016. meters, which is 2-3 times less than developed countries(in Europe, on average, about 60 sq. m. per person, in the USA, on average, about 70 sq. m. per person).
The regions with the richest housing are the Moscow, Tver and Novgorod regions. The least housing regions are the Republic of Tyva, the Republic of Ingushetia and the Chechen Republic.
The leader of the Russian construction market in 2016 was the Setl Group company from St. Petersburg, which commissioned 1.046 million sq. M. housing, which is 49.4% more than in 2016. Also, the top three leaders of the Russian market in 2016 included LSR Group (789 thousand sq. M.) And GC Absolut (562 thousand sq. M.). The most important events that will have a strong impact on the placement of players in the first echelon of the Russian construction market were the acquisition of PIK by Morton and the reorganization of SU-155.
From 2013 to 2015, the housing market in Russia saw an increase in prices, but in 2016 the situation changed - average prices for residential premises decreased by 1.4% to 54.04 thousand rubles per 1 sq. M. At the same time, the main factor in the decline in average prices for residential property in Russia in 2016 there was a decrease in prices in the secondary market.
The maximum housing prices at the beginning of 2017 were recorded in Moscow, St. Petersburg and the Kamchatka Territory. The cheapest housing in Russia at the beginning of 2017 could be bought in the Bryansk region, Stavropol Territory and the Republic of Kalmykia.
The consequences of the negative geopolitical background strongly influenced the development Russian economy in particular on construction industry... First of all, this is due to a fall in the income of the population, with a decrease in the volume of financing for construction, an increase in the cost borrowed money, complication of access to credit resources. At the end of 2017, a decrease in housing commissioning is forecasted to 75 million square meters. m. and in the future, a decrease in housing commissioning is expected over the next 2-3 years.
For more information about the state and prospects of the residential real estate market in Russia, please refer to the research “Residential Real Estate Market in Russia” conducted by BelBusinessConsulting specialists by following the link http://belconsult.ru/index.php?option=com_remository&Itemid=36&func=fileinfo&id= 249
RRG presented the results of market research commercial real estate for 2017. Key findings from analysts:
1. The volume of supply on the sales market over the year has significantly decreased with a simultaneous significant decline in prices. On the contrary, in the rental market, rates remained at the level of December 2016, with a less significant decrease in the volume of supply.
2. The volume of supply both in the rental market and in the sales market increased over the year only for retail premises. On the rental market, a decrease in rates was observed only for retail properties, and on the sales market, the decrease in prices for them in comparison with other types of real estate was maximum.
3. For individual segments in the rental and sales markets, the situation is as follows:
The decrease in rates for retail facilities was less significant compared to the decrease in prices and differed little for facilities both within and outside the Garden Ring. For street retail objects, rates and prices outside the center have decreased insignificantly, while in the center - much more significant (especially prices).
With the exception of offices rented outside the center, the volume of supply of office properties has significantly decreased, but if the rates increased moderately (more significantly - in the center), then prices decreased (more significantly - within the Garden Ring).
The total area of industrial and warehouse premises in the rental market has significantly decreased, while the rates have slightly increased. In the market, sales decreased at an average rate, both the volume of supply and prices.
The main conclusion
The lack of growth in the commercial real estate market, as before, is associated with an insufficient level of business activity in the construction of new facilities and extremely modest macroeconomic indicators. Despite the growth in investment in commercial real estate in Russia in 2017 by 27% compared to 2016, the lag in investment from the pre-crisis level of 2013 is more than twofold. In such conditions, the rental market feels more confident than the sales market.
The realization of deferred demand in the low office market due to low business activity is not yet able to lead to an increase in prices even in the context of a decrease in supply. The situation on the rental market is somewhat better, but the growth in rates is insignificant. Consumer demand remains low due to both low incomes of the population and the prevalence of the savings model. These factors have a negative impact on the retail space market in general and to the overstocking of the sales market in particular.
In 2018 - the year of the presidential elections - investment activity is likely to be traditionally low. In the absence of growth in investment and business activity, it can be assumed that there will be no noticeable improvement in the commercial real estate market during the year.
Sale
Market as a whole
Supply volume
With the exception of the start of the year and a major surge in October, supply in 2017 remained relatively stable. From December 2016 to December 2017, the volume of supply decreased by 17% in terms of quantity, and by 31% in terms of total area and amounted to 1,331 objects. with total area 1,738 thousand sq. m
Price indicators
Prices were gradually decreasing throughout the year, with two price corrections taking place in February and August. The decline in ruble prices over the year turned out to be comparable to the indicators of 2016 and amounted to 10%, and in dollar prices - 20%. The weighted average price in the commercial real estate market in Moscow in December 2017 decreased to 168,804 rubles / sq. m, or $ 2,865 / sq. m
The decline in prices, as in 2016, occurred in the context of a decrease in the volume of supply, which may indicate the absence of growth in demand under the influence of more than modest macroeconomic indicators. The total supply at a cost of 469 billion rubles. in December 2016 decreased by 38% and in December 2017 amounted to 293 billion rubles.
Supply volume
In 2017, the volume of supply in terms of the total area of retail premises increased by 42%. In all other segments, the supply volume, on the contrary, decreased: by 45% - for office premises, by 32% - for production and warehouse premises, and by 9% - for free premises.
The volume of supply in December 2017 amounted to 355 retail facilities with a total area of 319 thousand sq. m, 718 office buildings with a total area of 843 thousand sq. m, 101 production and warehouse premises with a total area of 353 thousand sq. m and 157 free-use premises with a total area of 223 thousand sq. m.
In the structure of the market in terms of total area, the leading position in December 2017, as before, was taken by office premises, the share of which in the market was 61%, the second place with a share of 19% belongs to industrial and warehouse premises, the share of free-use premises was 11%. and the share of retail space is 9%. Share office space over the year decreased by 3 pp, the share of retail premises increased by 2 pp, the share of free-use premises decreased by 7 pp, and the share of industrial and warehouse premises increased by 8 pp.
Judging by the decrease in the average area of exposed office and industrial and warehouse facilities by 23 and 27%, respectively, large premises are gradually being washed out of the market. On the contrary, for retail facilities and free-use premises, the average area of which increased by 22 and 13% over the year, demand shifted towards smaller properties.
Price indicators
A decrease in prices was observed in all segments and amounted to: 16% for retail facilities, 13% for office buildings, 11% for production and storage facilities, and 1% for free premises.
The volume of supply in value terms for retail facilities increased by 20%, for office premises decreased by 52%, for production and warehouse premises - by 39%, and for free premises - by 10%.
The minimum decline in prices for free premises in comparison with other types of real estate can be explained by the imbalance that arose in price dynamics in 2016, when the decline in prices for such properties was maximum. Therefore, most likely, in this case, we are talking only about price correction, and otherwise the demand for different types commercial real estate declined on a comparable scale.
The maximum decrease in prices in 2017 was noted for retail premises against the background of a significant increase in their supply volume. This may be due to the overstocking of the market due to low consumer demand in the context of low incomes and the spread of the savings behavior of the population.
Retail property
Supply volume
In December 2017, the total area of the offer retail real estate in the center compared to December 2016 increased by 19%, and outside the center - by 44%.
In total, in December 2017, 38 objects were put up for sale within the Garden Ring and 317 objects outside it with a total area of 20 and 299 thousand square meters. m respectively. The total supply of retail premises in December amounted to 355 objects with a total area of 319 thousand sq. M. m with an average area of 900 sq. m.
Price indicators
Prices for retail facilities both in the center and outside it from December 2016 to December 2017 decreased by 14% and amounted, respectively, to 622,400 rubles / sq. m and 194,422 rubles / sq. m. The price for all retail premises in 2017 decreased by 16% to 220,759 rubles / sq. m. The value of the supply of retail space for 12 months in the center increased by 3%, and in the periphery - by 24%.
Street-retail
The volume of supply of objects of the street-retail format in 2017 in terms of the total area increased by 51% and amounted to 34 thousand square meters. m. In the center, the total area of objects on display increased by 114% to 6 thousand square meters. m, and outside it - by 41% and amounted to 27 thousand square meters. m.
The weighted average price in the city as a whole decreased by 8% and amounted to 382,352 rubles / sq. m / year. In the center, prices fell by 33% to 732,913 rubles / sq. m / year, and beyond it - by 4% to 301,778 rubles / sq. m / year.
Compared to 2016, the situation in price dynamics has changed, and if in 2016 the maximum price decrease was observed for premises outside the center, then in 2017 the maximum price decrease was noted for objects already in the center. This situation testifies to the instability of the market development.
Office real estate
Supply volume
The volume of office supply in the center decreased by 53% in terms of total area and by 49% in terms of number, while outside the center it decreased by 44% in terms of total area and increased by 23% in terms of number.
In total, 102 objects with a total area of 87 thousand square meters were exhibited in December 2017. m within the Garden Ring and 616 objects outside it with a total area of 756 thousand square meters. m. Total supply office space amounted to 718 objects with a total area of 843 thousand sq. m with an average area of 1 174 sq. m.
Price indicators
Over the 12 months from December 2016 to December 2017, the weighted average price for office properties in the center decreased by 24% to RUB 327,424 / sq. m, and outside the Garden Ring decreased by 8% to 168,994 rubles / sq. m The weighted average price for all office premises in 2017 decreased by 13% and amounted to 185,378 rubles / sq. m.
Judging by the significant decrease in prices in 2017 for office properties in the center, the demand for them after the growth in 2016 has significantly decreased.
The decrease in the volume of supply in value terms amounted to 64% to 28 billion rubles. within the Garden Ring and 48% up to 127 billion rubles. outside of it, and in general, the cost of office facilities in 2017 decreased by 52% to 156 billion rubles.
Rent
Market as a whole
Supply volume
The volume of supply throughout 2017 fluctuated noticeably from month to month, but in general we can say that it grew until summer, after which it decreased. The overall decrease in the volume of supply in terms of space for 12 months amounted to 7%. In December 2017, 2,992 objects with a total area of 1,467 thousand square meters were exhibited on the market. m
Price indicators
During 2017, rental rates, like the volume of supply, fluctuated, but not significantly. The average rental rate in the rental market from December 2016 to December 2017 increased by 1% in ruble terms and decreased by 9% in dollar terms. In December, the average rental rate was 18,236 rubles / sq. m / year, or $ 313 / sq. m / year.
Against the background of low inflation (2.5% in 2017 according to Rosstat data) and extremely modest other macroeconomic indicators, a 1% increase in the rate can be assessed as quite good indicator characteristic of our "new economic reality". Compared to the sales market, the rental market for all types of real estate in these conditions feels much better.
Comparative analysis by segment
Supply volume
The growth rates of the supply volume in terms of the total area in 2017 in the rental market amounted to + 4% for retail, -5% for office and -13% for industrial and warehouse real estate. The total area of objects on display in December 2017 amounted to: 221 thousand sq. m for trade, 750 thousand sq. m for office and 496 thousand sq. m for production and storage facilities. Throughout 2017, the average area of exposed retail premises decreased by 8%, industrial and warehouse - by 15%, office - by 13%.
Price indicators
The average rate for retail space from December 2016 to December 2017 decreased by 5% to RUB 30,627 / sq. m / year, for office - increased by 3% to 17,129 rubles / sq. m / year, for production and warehouse premises increased by 2% and amounted to 6 526 rubles / sq. m / year. Judging by the decrease in the rental rate, retail premises were in the lowest demand.
The change in the annual total rent from December 2016 to December 2017 was + 23% for retail, -3% for office and -13% for production and warehouse premises.
After a slight increase in rates for retail premises in 2016, when rates for office real estate and industrial and warehouse premises decreased, the situation changed to the exact opposite. Low demand for retail space, as well as in the sales market, can be caused by low incomes of the population and the prevalence of a savings model.
Retail property
Supply volume
The volume of supply of retail premises by area in December 2017 in the center decreased by 31%, while outside the Garden Ring it increased by 7%. The change in the number of objects on display was -31% and + 18%, respectively.
In total, in December 2017, 43 objects with a total area of 10 thousand square meters were put on the market. m within the Garden Ring and 625 objects with an area of 211 thousand square meters. m outside. The total supply of retail premises amounted to 668 objects with a total area of 221 thousand. sq. m with an average area of 331 sq. m.
Price indicators
The average rate for objects in the center from December 2016 to December 2017 decreased by 2% to 62,471 rubles / sq. m / year, and for objects outside the Garden Ring has not changed and amounted to 28,438 rubles / sq. m / year. Judging by the significant decrease in rates for objects in the center for the second year already, the demand for them is decreasing. Annual rent for objects within the Garden Ring decreased by 31%, and outside the Garden Ring increased by 34%.
Street-retail
The volume of supply of objects of the street-retail format for 12 months in terms of the total area increased by 12%, incl. in the center decreased by 6%, and outside increased by 14% and amounted to 17 objects with a total area of 3 thousand square meters. m in the center and 224 objects with an area of 61 thousand sq. m outside.
The average rental rate for 12 months decreased by 9% to RUB 33,948 / sq. m / year, while in the center it decreased by 16% to 70,361 rubles / sq. m / year, and beyond it - by 4% to 31,184 rubles / sq. m / year ,.
The situation with demand for street-retail in the center is somewhat different from the situation for retail premises in general, in that in 2016 prices for street-retail in the center were growing. Nevertheless, in 2017, the decrease in prices for such objects clearly exceeds the decrease in prices for street-retail on the periphery.
Office real estate
Supply volume
The volume of office supply by total area from December 2016 to December 2017 decreased by 45% in the center and increased by 1% outside it. The change in the number of rooms on display was -28% and + 16%, respectively.
In December 2017, a total of 174 objects were exhibited within the Garden Ring and 1,612 objects outside it with a total area of 57 and 693 thousand square meters. m respectively. The total supply of office premises in December amounted to 1,786 objects with a total area of 750 thousand square meters. m with an average area of 420 sq. m.
Price indicators
The average rate for office properties in 2017 as a whole increased by 3% to RUB 17,129 / sq. m / year. Within the Garden Ring, the average rate increased by 10% and amounted to 28,049 rubles / sq. m / year, and on the periphery - by 5% to 15,950 rubles / sq. m / year. The total annual rent for office offers in the center decreased by 38%, and outside the Garden Ring - increased by 5%. Judging by the change in rates over the past 2 years, the demand for office properties in the center is higher than outside it.
Main conclusions
1. The volume of supply on the market for the sale of commercial real estate in Moscow for the year has significantly decreased with a simultaneous significant decline in prices. On the contrary, on the commercial real estate lease market, rates remained at the level of December 2016 with a less significant decrease in the supply volume.
2. The volume of supply both in the rental market and in the sales market increased over the year only for retail premises. ...
3. For individual segments in the rental and sales markets, the situation is as follows:
The decrease in rates for retail facilities was less significant compared to the decrease in prices and differed little for facilities both within and outside the Garden Ring. For street retail objects, rates and prices outside the center have decreased insignificantly, while in the center - much more significant and, especially, prices.
With the exception of offices rented outside the center, the volume of supply of office properties has significantly decreased, however, if the rates increased moderately (more significantly - in the center), then prices decreased (more significantly - within the Garden Ring).
The total area of industrial and warehouse premises in the rental market has significantly decreased, while the rates have slightly increased. In the market, sales decreased at an average rate, and the volume of supply and prices.
Main conclusion:
The lack of growth in the commercial real estate market, as before, is associated with an insufficient level of business activity in the construction of new facilities and extremely modest macroeconomic indicators. Despite the growth in investment in commercial real estate in Russia, in 2017 by 27% compared to 2016, the the pre-crisis level of 2013 is more than twofold. In such conditions, the rental market feels more confident than the sales market.
The implementation of deferred demand in the low office market due to low business activity is not yet able to lead to an increase in prices even in the context of a decrease in the volume of supply /. The situation on the rental market is somewhat better, but the growth in rates is insignificant. Consumer demand remains low both due to low incomes of the population and the prevalence of the savings model. These factors have a negative impact on the retail space market, in general, and to the overstocking of the sales market, in particular.
In 2018, the year of the presidential elections, investment activity is likely to be traditionally low. In the absence of growth in investment and business activity, it can be assumed that there will be no noticeable improvement in the commercial real estate market during the year.
August 2019: The rise in housing prices, provoked by a change in the situation on the mortgage market in the fall of 2018 and fears in connection with the reform of 214-FZ, ran out of steam by the beginning of summer 2019.Since June 2019, the average cost of a square meter has been marking time. Moreover, the demand for secondary housing in the Moscow region has fallen sharply, which may lead to a decline in prices in the coming months.
Nevertheless, many sellers in the secondary market still hope to realize their forecasts of an inevitable rise in the price of housing after July 1, 2019 - they inflate the cost of apartments and refuse to bargain. Against the background of a decrease in purchasing activity, such a strategy may have the opposite effect of the desired one. However, at least until September, the market situation will most likely not change significantly - both sellers and buyers will wait for the new business season. Read more about the trends in the real estate market in the articles and reviews of the analytical center website:
