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Moscow’s apartments set records, Sberbank lends mortgage loans for buying them

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Moscow’s apartments set records, Sberbank lends mortgage loans for buying them

What dynamics did the apartment market demonstrate in 2016 and what are the segment’s prospects this year?

Moscow’s apartments market is actively developing. In the 4th quarter of 2016, the demand grew by more than 37.5%, having shown unprecedented results in the whole history of the market

Offer

In the 4th quarter of 2016, four new compounds entered the Moscow market, but the total amount of apartments (632) in them is not big. Only 366 of them were put on sale, which is much lower than the results of the previous quarter, according to the NAI Becar’s http://naibecar.com/ investment and asset managers. Meanwhile, the new offer’s entrance to the market made it possible to increase the annual volume of housing commissioning by more than 30%. Thus, more than 1 000 apartments were brought to the market in 2016.

By the end of December apartments in 106 compounds were offered on the market, with 9 092 apartments put on sale. The offer volume grew by almost 4% during the year.

 

Objects put on sale in the 4th quarter of 2016

Company name

Class

Format

Year of commissioning

District

Total/ on sale

Developer

 

Nabokov

Elite (premium)

buy-to-live

2017

СAD

15/15

Vesper

 

Monodom

Business

buy-to-live

3quart.

2018

CAD

187/128

Biplan М

 

Verden

Business

buy-to-live

2017

NEAD

90/31

Ukrrosmetall

 

Barbaris

Comfort

buy-to-live

2 quart.

2018

NEAD

340/192

“MITs” GC

 

Source: NAI Becar

 

Business-class apartments are traditionally the leader of the market (70%). The majority of apartments are for personal living. Investment programs are present only in 13% of the compounds.

Demand

By the end of the year the demand for apartments had grown by an unprecedented 37.5%. According to analysts, it is the highest such demand in the history of the market (550 apartments). The average monthly rate of sales in business-class objects is 7 apartments, while it is 5 apartments in comfort-class compounds and 3 apartments in elite houses with apartments.

It is not surprising that the boost in purchasers’ activity and the simultaneous rather modest commissioning of new objects resulted in this increase of the process for apartments in all market segments. Nevertheless, developers and brokers offered rather high New Year discounts of up to 20%. Experts think it is connected with developers’ desire to raise the rate of sales and getting the guaranteed income before withdrawing from such projects.

On the whole, the most steady prices on the market for the last two years were observed in the sector of comfort-class apartments. They remained at a level of 150,000 roubles ($2,597) for a square meter. The price for business-class apartments fell a little. Prices for elite-compounds’ apartments had reached the level of 2014 by the end of 2016.

In absolute figures, the prices for comfort-class apartments were 148,000 roubles ($2,563)/sq. m, having increased by 9.4% when compared with the third quarter, 226,200 roubles ($3,917)/sq. m (+4,7%) – in the business class, and 475,400 roubles ($8,234)/sq. m (+7,9%) in the elite class.

Moscow’s apartments set records, Sberbank lends mortgage loans for buying them

Price dynamics depending on the class (roubles/sq. m)

Results

2016 showed that despite a number of difficulties the apartments sector in Moscow is alive, in demand and ready for further development.

This is confirmed by the fact that the authorities started active work on the creation of the legislative basis for the apartment’s sector regulation. At the end of 2016, the Moscow government adopted a list of compounds with apartments, the owners of which will get preferences for personal property tax.

Presently, the list includes 7 objects but experts suppose it to be the beginning of great changes that will be able to make the apartment sector clearer and more available for purchasers.

 

Market dynamics in 2014—2016

 

Semyon MORON

With the use of NAI Becar’s materials

 

Apartments in Moscow in 2016, results and forecasts

 

Offer

1. Offer volume in the 4th quart.— 9 092 ap. in 106 compounds including:

– Buy-to-live apartments — 7 927 ap.in 92 compounds

– Buy-to-let apartments — 1 165 ap. in 14 compounds

2. New offer volume — 366 ap. in 4 projects  (↓ -71,5% by the 3d quart. of 2016)
(«Nabokov», «Monodom», «Verden», «Barbaris», all buy-to-live projects)

3. Offer structure: comfort class — 13%, business class — 70%, elite class —17%

 

Market conditions

Sales prices:

– Comfort class — 148,000 roubles/sq.m (↑+0,9% by the 3d quart. of 2016).

– Business class — 226,200 roubles/sq.m (↑+4,7% by the 3d quart. of 2016).

– Elite class — 475,4000 roubles/sq.m (↑+7,9% by the 3d quart. of 2016). 

Demand:

– in the 4th quart. of 2016 550 units sold (↑+37,5% by the 3d quart. of 2016). The average rate of sales for the project: comfort class — 5 ap./mon., business class — 7 ap./mon., elite class — 3 ap./mon.

 

The results of the 4th quart. of 2016

– Price growth in all classes of sales

– Outstanding demand volume in the 4th quarter of 2016.

 

The year’s results

– 90% of the apartments brought to the market in 2016 are buy-to-live ones (19 projects).

– Sales prices for comfort and business classes went down by 10% and 4%, respectively, and grew by 17% in the elite class.

– 1 750 apartments were sold in 2016, which is 25% more than in 2015 г.

 

Forecast2017

– 5 apart-compounds with 3,500 units will start to be sold at the beginning of 2017.

– The demand is likely to stay at the level of 400—450 units a quarter during 2017.

 

Sberbank started to lend mortgage loans for apartments

Sberbank of Russia has started lending mortgage loans for the purchase of apartments in new buildings. The credits are lent within the program, “Purchasing housing under construction”, which includes apartments’ crediting.

The rates are from 11.5% to13.0% a year. Those who want to buy apartments may use an additional discount of about 0.5 pp to buy property in some regions of Russia. The offer is valid until February 28, 2017, the rate range is 11.0—12.5% a year.

The offer is valid for 18 regions of Russia, including Moscow, the Moscow region, Saint-Petersburg and the Leningrad region, etc.

However, Sberbank is not the first to offer it: HMLA, Deltacredit, VTB24, Rosselkhozbank, Otkrytiye bank and Binbank have similar programs.

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