Preferential mortgages increased demand for new buildings 15:14

There was a liquidity problem in the secondary housing market in the first quarter of 2024. In this respect “Rossiyskaya Gazeta” said real estate expert Elena Borisova.

According to him, one of the main reasons was that the market was saturated with new buildings. More than 100 million square meters of construction was completed in 2022. m2 of residences, of which more than half (56%) were built by citizens. In 2023, residential construction volumes increased to 110 million square meters. m, 53% of which were private houses.

Borisova noted that the number of new projects launched in the regions increased by 21 percent compared to last year. Preferential mortgage programs encourage the purchase of apartments in new buildings, whose rates are 1.5-2 times lower than second home loans.

The high interest rate of the Central Bank of the Russian Federation also negatively affected the secondary market. “There are less than 30 percent of buyers with cash, so in April sellers made concessions,” the expert said.

Spring traditionally sees increased demand. But in April, only sellers in dire need of funds reached agreement. This led to a price drop of between 0.5 percent and 1.5 percent, depending on the region. The biggest decrease in apartments occurred in Ryazan (-1.5%), Vladivostok (-1.11%) and Balashikha (-0.87%).

Two scenarios are possible in the future. If the macroeconomy stabilizes and the interest rate falls, second home prices may rise to the level of new buildings, which will increase their attractiveness. If concessional mortgages for new buildings are limited, demand may flow into the secondary market, but there will not be a significant increase in prices due to the high cost of loans.

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