Buying an apartment has become impossible for the middle class, even with a mortgage

Posted on Sep 12, 2012

Rising prices for capital buildings stopped, but this is temporary, says the majority of analysts. The excitement was over, and with it the price race, wiping out consumers with incomes average and below average, even influenced by the behavior of buyers of luxury housing that are not ready to pay the required money for the quality offered.

According to “MIAN – Real Estate Agency”, the number of transactions in the primary market of Moscow in 2006 is 33,350 and nearly 30,000 – in the suburbs. But demand is still not satisfied, and a significant increase in supply, which would significantly adjust the prices down, is not expected. In contrast, although the total volume of the input space is not reduced, the Moscow market gets fewer apartments, curled “Vedomosti” principal analyst of the Russian Guild of Realtors Gennady Sternik. Program for the construction and social housing is increasing. A City Hall plans to reserve 80% of apartments in new buildings for Muscovites, if realized, may also encourage the growth of prices.

Now the most common verdict of market participants: has projected stabilization. Explanations why prices stopped now, there are many. It is said to lower the price of oil, the theory of crises and that “growth is not infinite.” Oleg Repchenko, head of the analytical center irn.ru, believes that prices have risen to the level where it became impossible to buy an apartment for the middle class, even with a mortgage. But demand and tighten again will push prices higher. Forecast for the end of 2006 and start of 2007 – an average increase in prices in the range of 1-2% per month. Variations are possible depending on the quality of the object and the policy builder

Now Q1. m in the building in good areas of Moscow, according Repchenko, costs from 5000 to 8000 dollars, in remote areas outside Moscow – cheaper, about 4000. According to market analyst Andrei Beketov, the average bid price for monolithic buildings – 4548 dollars for 1 sq. m. m, and in the panel – 1Q 4058. M. Beketov notes introduced in September – October, steady price gap on monolithic and prefabricated housing, which has been reduced to a minimum in the period of high growth rates, when buyers were interested only value, but not the qualitative characteristics of the apartments. According to him, the new building in October rose by 5%, and in November – by 4%. A more likely scenario until the end of the year – even (by 0.5-1% per month) reduction in the rate of price growth.

“Price growth will soon stop at the level of 3-4% per month – predicts Vladislav Lutskov, head of the analytical center of the consulting company” MIEL-Real Estate. “- Cost per square meter will come close to $ 5000, but will likely not step over this barrier. ” Although with the elite facilities, this barrier is overcome, in October, when the price was 5,165 dollars per square meter.

However, already now the prices of luxury properties are so high that “the part of buyers and investors focused more on business-class housing,” said Alexander Shatalov, partner IntermarkSavills.