During the crisis the real estate is cheaper: reduced income, fewer people can afford the purchase of housing, the demand falls. In April, according to United credit Bureau (OKB), the volume issued in Russia mortgages dipped by almost 40%. However, sellers of apartments, trapped in a difficult life situation, you have to lower the price tag. Starts snowballing process — reduce prices for other homeowners, the market falls.Does it make sense to buy an apartment now or should I wait for cheaper housing? Aify learn from the experts.Elena Ivankina, head. the Department of real estate and housing market of the faculty of technology Institute of industrial management of Ranepa:”the Beginning of 2020 showed a progressive development trends of the real estate market: stable demand growth and a slight increase in housing prices. But a known event (the decline in oil prices, the increase in the exchange rate and pandemic COVID-19) had a negative impact on the real estate market. The demand for housing in March decreased by 54,9% compared to the same period of 2019. And in April — by 65.1%. Less damaged buildings of the Moscow region. The number of transactions on these objects in April decreased by 50%, in Moscow — 30%. The sharp decline in property prices did not happen, but increased discounts and bonuses, up to 10-15%. Secondary market harder moved coronaries, given that discounted mortgages at 6.5% applies only to new buildings.As expected, the Central Bank of the Russian Federation, because in the early stages of Russia’s GDP in 2020 could be reduced by 4-6% (the IMF predicts a fall of 5%). The HSE forecasts, in 2020 the expected reduction in incomes of 8.2%. Together these developments may lead to a fall in housing prices by 10-15%. Very likely the growth of benefits, discounts and bonuses for the sale of housing. It is expected stagnation of the secondary market amid rising suburban real estate market”.

What to do with the mortgage apartment, if you can’t pay the loan? Three scenarios
Read more

Vladimir Prokhorov, a member of the General Council of “Business Russia”:”If we consider the situation from the perspective of mortgage interest rates, today have the ideal situation for housing. First of all it concerns buildings. Hope to see even more lower rates is not worth it.If we consider the situation from the point of view of developers, it is also for the benefit of the buyers. Real prerequisites to lower prices for housing developers there. Moreover, the price per square meter in new buildings today are in an optimal balance of supply and demand. While there are no prerequisites and a substantial increase in prices. All of the processes associated with, for example, rising prices of building materials in conditions of falling real incomes, developers will be solved through optimization. Today, it is not economicKai situation to raise housing prices. If the buyer were planning to purchase apartments, but postponed the decision today is to accept it and to purchase housing. Until mid-fall in the housing market is unlikely to undergo serious changes”.Vitaly L. Mankiewicz, President of Russian-Asian Union of Industrialists and entrepreneurs:”the housing crisis is worth buying for those who have significant savings and crisis a “safety cushion”. At the beginning of the crisis, as a rule, people try to save their savings, so there is a slight increase in demand for property, which most Russians associate with a reliable investment. Now we see how it starts with a series of cuts, the wage cuts, so accumulation of those who were going to buy an apartment or saving up for a down payment on the mortgage, spent on food and payment of rent, the demand for property naturally begins to decline. For 2020, the real incomes of Russians could fall by 10-15%, respectively, it will hit the demand for real estate. New buildings have already begun to respond with discounts of 3-5% and a stock, but this is only the beginning of the fall. By summer — early autumn discounts can reach 7-11%. The main blow is necessary on the secondary housing market: the end of the year the demand for it is reduced to 40%, and prices can correct up to 20%. Preferential mortgage at 6.5% is not able to block the falling demand and falling incomes.After housing will buy those and so had planned to do this, the property market expects long-term stagnation a period of 3 years, something like we saw in the years 2015-2017. This will reduce the number of proposals for the sale of second homes, as sellers more profitable to “ride out” the crisis than to sell the house at a low price. Also the market will be a large number of apartments with a discount, which will be seized from debtors, mainly of food, which can not cope with their obligations. It will also put pressure on the secondary real estate market”.

Housing in Chukotka. How many years to save up for an apartment in the regions
Read more

Alexander Shiryaev, head of pricing of the developer:”Now, perhaps, one of the most profitable periods to buy a home. And the new reduced mortgage rate under the program of state support — motivating factor. For example, when buying a mortgage at 6.5% standard one-bedroom apartment for a period of 10 years, the amount of the final payment will be reduced by more than 10%. And it is quite a considerable discount for the buyer with any income.Many developers selectively give a discount of 5-7% on selected pools of the apartments and reduce the prices of some flats at 1-3% without ascertaining the fact of discounts. Bonus upon online purchase of an apartment entered Pochti all developers, the average is 1-2%”.Alex Bolorin, Professor of the Department of banking of the University “synergy”:”the Pandemic has led to a reduction or even loss of income from a large number of families. Although the housing issue sooner or later becomes relevant to every family, without exception, it involves decades of payments to the banks on mortgage loans, which may be units, confident of their future in terms of jobs and wages. To date, despite state support of developers and the promise of subsidies on the mortgage at 6.5%, people are unlikely to be willing to make the decision to make multi-year loan commitments even with discounts of developers that are likely to be offered to buyers to maintain and replenish its own cash flow. But as the developers themselves attract loans to implement their projects (introduction of escrow accounts confirms the effective demand and the willingness of purchaser to purchase the property, but does not allow to use money from the buyers in course of construction), discounts may not be large, since the creditor banks will not allow developers to change their financial model.Secondary market in this respect can offer any discounts, but the collapse of demand in this market will not cause the rapid fall of prices. Focusing on the dynamics of prices in the primary market, the sellers of resale properties will have to follow price trends, but with the exception of emergency situations, the lack of time from owners of resale properties is missing.The conclusion is that in the near future growth of activity in the real estate market is not going to happen.”

The arithmetic of the mortgage. How to save up for a down payment?
Read more

Ruslan dry, developer and investor in real estate:”Now is an excellent time to find a good object, to negotiate with the developer on a maximum discount. Quality projects will build less. The increase in construction costs of residential real estate caused by the increase in the exchange rate and transfer to the escrow account, forcing developers to take a haircut in return, so they will start to make projects more economical, to reduce the cost of finishing or infrastructure.To buy apartments in the pit to earn on its resale is not worth it. The strategy of buying property on the zero cycle of construction for the purpose of selling a thing of the past. If earlier it was available to earn money without thinking about the location and the quality of the object, then with the current level of trench prices make it virtually impossible. The exceptions are individual projects with unique location, right concept, high quality of construction and, most importantly, small to��the widgets of the apartments.”Hope Korkka, managing Director of real estate company:”From the point of view of the conditions offered by banks and developers, now is a good time to purchase property. Never before have mortgage rates not dropped to the level of 6-6,5%, and after the subsidy program (up to November 2020) interest rates may again increase. Therefore it is better to seize the moment now, especially considering the fact that the banks are not so willing to approve an application during the crisis, and it is possible that you will need to do more than one attempt to apply. In addition, some developers retain the discount program and subsidize an additional mortgage of up to of 0.1-0.5%.There are no clear prerequisites to ensure that housing is cheaper. Increased construction costs due to the devaluation of the ruble, as well as the industry’s transition to the new funding model, involving the assistance of a Bank loan is funds investors”.