Real estate in Moscow: prices are rising, but this does not stop the rich

Real estate in Moscow: prices are rising, but this does not stop the rich
Real estate in Moscow: prices are rising, but this does not stop the rich
26 January 2021, 16:24Economy
In the first three weeks of January, prices for new buildings in Moscow rose by 2.1%, according to CIAN. If this unprecedented growth continues until the end of January, then according to real estate market analysts, it could be a fantastic 3%!

At the same time, at the end of last year, many experts assured that the "mortgage bubble" was deflating, and they predicted a 6-9% rise in prices for the whole of 2021, slightly higher than inflation (and they found this growth quite acceptable for developers). But, as we can see, the first month of 2021 refutes such forecasts.

Experts from the Proeconomics channel believe that there are probably two more reasons for the new price surge, besides the "mortgage bubble".

The first is the washing out of apartments from the market. They are simply physically less by 15-20-25% than a year ago. The construction cycle is 2-3 years, and projects from 2018 are currently on sale.

The second reason they call the return to the real estate market of speculators, who until 2014 were one of the drivers of market growth. To get 15-20%, and for the most successful residential projects and 30% per annum is a tempting prospect.

And one more half-reason can be called low deposit rates in banks. Which are now below the inflation rate. Some people with money just want to keep it in an understandable, conservative form of investment - in housing.

According to economist Dmitry Prokofiev and financier Nikita Demidov, this last fact is connected with the record growth in sales of deluxe and premium real estate over the past 6 years.

The average price in the elite real estate market has reached a 5-year high: the premium class has risen in price by 15% per year, to 696 thousand rubles per sq. m.

In the deluxe segment, the growth was 18%, up to 1,362 thousand rubles per sq. m.

During the year, 1.3 thousand transactions with a total value of 112 billion rubles were concluded on the market.

In monetary terms, sales increased by 10% compared to 2019 and by 45% when compared with the indicator 2 years ago.

Commenting on these numbers, analysts write:

“This is a story that there are several economic contours in the Russian Federation, and everything is fine in the upper one.

At the same time, the bosses are convinced that they are doing everything correctly and must continue in the same spirit - they also see that the income and consumption of the top do not decrease.

True - and this is important - in 2020, bosses bought apartments with money received, conditionally, in 2019. Here we must, of course, look at what will happen at the end of 2021.

But, on the other hand, such purchases speak best of all about the absolute confidence of the bosses in their own tomorrow's well-being..."

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