Decrease in deposit rates will lead to further growth in the share of investors in real estate

Decrease in deposit rates will lead to further growth in the share of investors in real estate
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Donstroy analysts have calculated that over the past 4 years, the number of equity participation agreements registered in Moscow has increased 4.3 times, and amounted to 57.5 thousand at the end of 2019. At the same time, the share of classic investors who purchase real estate for the purpose of rental business or resale in the company is about 20%. A decrease in deposit rates to an average value of 4.9% will further increase the share of investors in the Moscow real estate market, which is traditionally considered a “safe haven” in economically unstable situations.

Interest in real estate investments traditionally increases during periods of high volatility in the markets due to the possibility of uninterrupted receipt of passive income, stable growth in value and the stability of sq. m to inflation.

“One of the current trends is a significant increase in the interest of VIP-clients to invest. Thus, the increase in the investment portfolio of VTB's Private Banking in March-April amounted to 120 billion rubles, which is several times higher than the same indicator for January-February (6 billion rubles). I would like to note that since the beginning of the second quarter we have seen a gradual increase in demand for alternative investments, including residential real estate, ”said Natalya Biryukova, Head of VTB Family Office Private Banking Directorate.

It is customary to consider investments in new buildings in two directions: buying an apartment at the construction stage for subsequent resale or for further renting. According to the company Donstroy, with the right choice of the investment object and the moment of entering the transaction, the profitability from the purchase can significantly exceed the financial efficiency of bank deposits and with an investment horizon of 3 years is on average 33%. For example, the average cost per sq. m in the residential quarter of the business class "Heart of the Capital" from 2019 to 2020 increased by 11.1% from 207 to 230 thousand rubles per sq. m.