Minus 50 percent: Housing builders went into freefall in April

Yekaterina Ivanova

A sharp drop in sales of apartments in new buildings is evidenced by data on the number of DDUs registered in April 2022 (contract for participation in shared construction - ed.). But even such statistics at the moment will not help to correctly assess the scale of what is happening.

“Preliminary estimates based on the analytical platform bnMAP.pro for major Russian cities give figures of minus 40-50% of registered contracts. But this is not a completely accurate picture of the current market. The contracts registered in April were signed not only this month, but also in the previous ones (in completely different market conditions). We will receive more accurate estimates of the fall in demand only next month. Preliminarily, we can say that the number of signed, rather than registered, DDU agreements in April decreased by a multiple (2-4 times)”, - commented Mikhail Khorkov, Deputy Chairman of the Analytics Committee of the Russian Guild of Realtors.

In his opinion, not only megacities and rich regions have faced such a trend. In small towns the situation is comparable.

Anton Baranov, Chairman of the Committee for Realtor Activities and Professional Standards of the Association of Realtors of St. Petersburg and the Leningrad Region, briefly described the current situation in the primary market as follows:

“There are very few buyers with real money, the state is trying to stimulate mortgages, but at the moment the developers are frozen, they have a lot of free square meters.”

At the same time, Anton Baranov is confident that developers will not reduce prices for new apartments in the foreseeable future. Perhaps this will happen, but only when the market reaches the bottom and there are almost no buyers left. Developers to the last will introduce various promotions, subsidize the rate, that is, try to lure the buyer.

Anton Baranov believes that the situation on the construction market is so non-standard that it is simply impossible to give short-term and even more so long-term forecasts. At the same time, the expert is pessimistic: the volume of housing being built will be reduced (companies are completing construction projects, but future facilities are a big question), small and medium-sized developers will disappear from the market, only giants will surely survive, who will begin to dictate their prices.

The Chairman of the Committee on Realtor Activities and Professional Standards of the Association of Realtors of St. Petersburg and the Leningrad Region, in the current realities, strongly recommends potential home buyers not to make chaotic movements and, when planning a transaction, be sure to seek help from experts.

“My advice: do not climb now yourself - it will kill you! Even regardless of the reason for the transaction. If we are talking about an investment purchase, then there are only assessments and risk criteria, and the “package” of these risks has changed. If you are a simple consumer who urgently needs to buy an apartment and immediately live in it - another question. It is necessary to calculate everything and at the same time deeply understand the current situation,” warns Anton Baranov.

Mikhail Khorkov believes that the instrument of investment purchase of a new building, when people bought apartments in order to rent them out, ordered a long life.

“At the moment, such transactions are a thing of the past. Back in March there were a lot of them, but now the market is working with end users. Most likely, this trend will continue for a long time, ”Khorkov predicts.

Recall that preferential mortgage programs work in Russia. So, from May 12, IT-specialists will start lending in banks at a reduced rate. Also in May, preferential mortgages at 9% were launched in the primary housing market. It is available to everyone. Banks have begun to work on this program. In addition, a number of large developers offer their mortgage programs at minimum rates (sometimes at 0 percent!). However, in each specific case, one should understand whether such tempting promises are a publicity stunt, and whether there is a real mortgage behind them, included in the cost of housing.