Real Estate Forecast for 2019-2020

Content

1 Economic background
2 Pricing factors
3 Analyst Forecasts

Real estate operations attract many investors, but this business remains quite risky due to market instability. Ordinary citizens also try to choose the best time for the sale or purchase of apartments. To make a forecast of the situation for 2019-2020, experts take into account many factors of the economy.

Economic background

The crisis of 2015 led to a drop in housing development, and caused a jump in prices per square meter, which was replaced by a “collapse” of the market. The next two years, the situation was characterized by a slow drop in prices and the freezing of large construction projects - this process was especially noticeable in the capital. 2018 caused a revival in the market: real estate agencies noted that the results of the year exceeded all their expectations in terms of sales.

Analysts explain this recovery by the fact that the population was saving money for several years, fearing inflation and a shortage of funds, but the relative stability of the economy and a decrease in mortgage rates caused a wave of consumer activity.

Apartment plan

Pricing factors

The formation of prices is influenced by the totality of economic processes.

Although housing demand is not declining, analysts have noted a general decline in purchasing power. It is caused by inflation, rising VAT, rising gas prices - household expenses are growing, despite the fact that wages practically remain at the same level. The consequence of this may be some “inhibition” of the acquisition of real estate in 2020.
The end of 2018 was marked by an increase in the Central Bank's key rate to 7.75%: the rate reduction course, which the Central Bank followed for 4 years, was replaced by maintenance. Mortgage programs in 2018 showed unprecedented loyalty - some offers ranged from 8-9% per annum. This caused a surge in activity - citizens who did not dare to take out loans in recent years were attracted by favorable rates. As a result, housing lending increased by 42% compared to 2017. However, in the period 2019-2020, the average rate will be at least 10-12%, so the volume of mortgage loans will decrease. Nevertheless, the mortgage remains the most sought-after tool in the real estate market - at least 50% of transactions are made with the involvement of bank funds.

The volume of commissioned new buildings decreased by 10-15% compared to 2017-2018, depending on the region. This is primarily due to the fact that in 2015 the crisis hit the construction industry and the number of launched projects decreased. A supply deficit forms, which can lead to an increase in property prices.
Changes in the law "On participation in shared construction ..." No. 214-FZ entail a decrease in the number of developers - only large players will remain on the market. The essence of the reform is that shared construction as a tool will no longer be applied. Now developers contribute 10% of their own capital, the remaining funds are provided to them by banks under credit programs, and the funds of interest holders are stored in the bank account until the object is completed. Also, developers are tightening requirements in the field of control over borrowed funds and other indicators of economic stability of companies.
The main pricing factor is the demand for housing in the region. In provincial cities and villages, prices drop to 400-500 thousand rubles. for a one-room apartment. And cities with population growth increase prices as demand.Demand is formed depending on the economic activity of the region: jobs, large enterprises attract young people, future buyers of housing.

Kitchen

Analyst Forecasts

Gennady Sternik, a certified real estate analyst, suggests that prices will not rise until 2020, as demand is lower than supply and real incomes are falling. He argues that sales will decline amid the political course: raising the retirement age, taxation, and other unpopular measures to “pull” the economy out of the population. However, further economic growth will cause an increase in citizens' incomes and consumer activity will increase.
Stanislav Rishko, an expert in the field of premium real estate in Moscow, believes that the cost of apartments will increase by at least 10% in new buildings in the capital, since toughening conditions for developers will increase the cost and cost of housing. However, secondary housing, in his opinion, will fall by 3-5%, as sellers' expectations are too high, and many properties are not sold for years.

Ildar Khusainov, director of the Etazhi real estate network, predicts a decline in sales over the next few years. He attributes this to several factors: the rise in price of primary housing due to tightening requirements for developers, an increase in the mortgage rate, and the slowdown in the commissioning of new properties. Mortgage volumes, he said, will decrease by 10-15%, and apartment prices will rise by 3-8%. In addition, in connection with the forecasting of a rise in price and the heating of demand, in 2019 people will begin to actively buy housing, which will only accelerate the growth process.
The representative of the IRN-Real Estate analytical bureau, Julia Ryshkina, suggests that the cost of square meters will not increase, since the population is already “re-credited” and wages are not rising. The rise in price in 2018, in her opinion, is associated with a reduction in interest rates by banks, but this process will reverse in 2019.

Real Estate Price Forecast

We can conclude that in 2019-2020 the market will “drop” by 10-15%, as the volume of mortgage lending will decrease, and the cost of square meters will increase.

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