MOSCOW, December 29. /TASS/. Low mortgage rates, high volumes of new housing commissioning, renovation in Moscow, perpetual privatization across the country and phased abandonment of cooperative housing construction projects are positive preconditions for the housing sector in Russia, experts questioned by TASS say. These events will be positive preconditions, making it possible not be afraid of price hikes for residential properties in Russia.
Apartment prices on the Moscow market will most likely remain stable in the first half of 2018 and the secondary housing may even see a price decline, deputy chief executive of RK Stroi Sergei Kolos said. Amendments to legislation on cooperative housing construction, prohibiting direct raising of funds from shared construction participants for developers, will come into force by July 1, 2018. "Consequently, we will see a surge in offers at the design and construction start phase, struggle for buyers and price wars in the second half of the year," the expert told TASS.
"The average price growth across the market will most likely to be modest," managing partner of Metrium Group Maria Litinetskaya said. The average price per square meter in new mass developments added just 1%, she noted.
The average price will grow within inflation limits or slightly higher, while growth of offer will continue, board chairman of BEST-Novostroi Irina Dobrokhotova said.
The first quarter of 2018 will keep the price stability characteristic of the market throughout 2017, general director of Tekta Group Roman Sychev said. "Prices will grow in accordance with the implementation phase in projects demonstrating high growth rates," he noted.
"Both declared and actual secondary property prices will continue to decline gradually until we reach the price bottom in 18-24 months," department director of INCOM-Nedvizhimost Sergei Shloma said. No significant price growth is expected on the secondary market even after hitting the bottom because this segment faces strong competition with the primary real estate market, the expert said.
Sellers of elite capital estate also expect the price decline. "The drop will be 10-15% on the secondary market and 3-6% on the primary market," department head of Usadba real estate Elena Lashko says.
Demand is stagnating on regional markets, Litinetskaya said. According to Metrium Group data, 495,000 shared construction participation contracts were registered in Russia (net of Moscow) in ten months of this year, down 5% year-on-year. The decline of newly built housing demand was recorded in 51 regions of Russia during that period, she added.
At the same time, the secondary market in region is still oversaturated with properties offer and prices are overstated in certain cases, head of Mir Kvartir web portal Pavel Lutsenko said. The price per square meter declined 3% and the price per lot dropped 2.8% on average across all Russian cities in 2017, he told TASS.
"The overall growth of two indicators was noted in just 14 cities out of 69, while 45 cities demonstrated the drop by both parameters. Such state of affairs primarily evidences the continuing downward trend for prices," the expert noted.