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Friday, October 28, 2016

Visitors save the real estate market of the capital

Sociologists say about the unusual and contradictory at first glance, trends. The economic crisis, on the one hand, has brought down the real estate market, especially in Moscow, prices for apartments which are obscenely high. But, on the other hand, at the expense of newcomers slowly began to grow sales in new buildings.

Daily in search of a better life in the capital thousands of people. Only in January 2016 in Moscow from depressive Russian regions arrived at 100 thousand Russians more than in the beginning of last year. This number wanting to move from a quiet province to the bustling capital was not even in the time of perestroika. According to VTSIOM, in 1990, to change the place of residence for higher paid work was ready 40% of Russians. In 2015, their share increased to 48%.

photo: Roman Orlov

About his desire to move to a large city and Moscow declare and young people. According to a survey by the Russian Academy of national economy, only 4% of graduates living in small cities, are going to stay there after the end of the 11th grade. And 75% of young people believe that they will live in a larger populated area than their home town.

On average, 40% of visitors go back home for 2-3 years. The remaining 60% find a permanent job and begin to tackle the housing issue — renting a house or buying an apartment on their own resources or with the help of mortgage lending.

And here is the result. In the first quarter of 2016, the regional share of buyers of apartments in the primary market of Moscow amounted to 16% — 1.5 times more than at the end of 2015.

Experts identify five main reasons — both obvious and not — contributing to the increase in the number of migrant workers.

First — of course, higher salaries. According to Rosstat, the average monthly nominal wage in Russia in March 2016 amounted to 35.5 thousand roubles, and in Moscow — 70,5 thousand RUB It in two times higher than the Russian average, and more than three times than in many regions of the country. Compare: in Kostroma, Orel, Pskov, Smolensk and other regions, the average salary in March does not exceed 21 thousand rubles. In Moscow much more (35-45 thousand) at times gets even unskilled staff — cleaners, messengers, cashiers, porters, waiters.

Reason number two is the ability to find work in the capital. The number of unemployed in Russia in April 2016 in comparison with the same period in 2015, increased by 100 thousand people (2.3%) and reached 4.5 million Share of the unemployed in Moscow is 1.9%, whereas in many other regions this figure is higher by 3-4 times, maybe more. For example, in the Vladimir region unemployed, 7.2 per cent of the total working population in the Yaroslavl — 7,3%, in the Vologda — 7,9%, in Murmansk — 9%. More than 60 thousand regional companies this year announced the upcoming reduction of the staff. A year earlier the figure was slightly more than 25 thousand. In General, it is obvious that in comparison with the regions in the labour market of Moscow there is no shortage of vacancies. Despite the crisis, for most items, the demand from employers exceeds the supply.

The third reason is the relative affordability of apartments compared to the previous years. According to “Metrium Groups”, the minimum cost per square meter in the primary market of Moscow in may of 2016 amounted to 95 thousand rubles — in studios, 86 thousand — one-bedroom apartments, 73, 5 thousand — in the bedroom and 79 thousand in “treshka”. Thus, the gap between Metropolitan and regional prices was much less than a few years ago. For comparison, the average price per square foot in the real estate market in Nizhny Novgorod in April of this year of 67.7 thousand rubles, in Samara — 65 thousand roubles, in Voronezh, Ryazan, and Yaroslavl — 48 thousand rubles. “The cost of studios in new capital starts from of 2.52 million RUB, one-bedroom apartments — from 3.33 million RUB, Suite 4,68 thousand rubles,” — said the expert of the company.

But a few years ago, the “entry ticket” to the Moscow market was worth 5 million rubles., and for this price you could buy only a small “odnushku”. Now, selling the property in another city, the owners can at least bail out money for the down payment for housing in the capital building. And if the ownership of a large apartment, then its value may be sufficient for the full payment of affordable housing in the primary market of Moscow, even without a mortgage.

Mortgage with a subsidized rate plus the following. In 2016 has been extended to the state program of mortgage lending. The interest rate on it is 11.5–12%, which is below market rates at 3-5%. The loan may be issued for up to 30 years, the maximum amount for customers who buy housing in Moscow is 8 million rubles., whereas in the regions, this amount is limited to 3 million roubles. “The share of buyers from the regions, acquiring an apartment using a mortgage loan up to 90%, — experts underline. — The initial payment on the mortgage with state support is 20%. It turns out that the cost of housing in new buildings of 2.5–3 million rubles for a down payment you will need 500-600 thousand rubles. And if earlier banks are reluctant to give loans to customers from regions without Moscow registration, now the conditions for granting mortgages to nonresidents in most credit institutions do not provide for permanent registration in the capital. Enough to have permanent registration in any region of Russia.

And finally, the reason is not obvious. Because of the impoverishment of the population, a huge number of new buildings in the capital are empty, and their owners are dumping. By the end of may 2016 in the primary market of the capital’s housing economy and comfort class was presented 45 projects (148 buildings). They exhibited about 16 thousand apartments ranging from 22,1 sqm, in recent months increased the number of lots in homes already in operation. Now their share is 16.6%.

Some analysts cautiously believe that 2017 is still possible rise in apartment prices associated with rising costs of materials and construction costs, the impact of pent-up inflation and reduce the supply in the primary market. Prerequisites for this are several. Permits for construction of residential complexes this year issued by 20-25% less than in 2014-2015 years, respectively, after two years on the market may be a shortage of new facilities. And if the economic situation in the regions will deteriorate (and certainly there is little doubt), the share of regional buyers in the capital’s buildings will continue to increase.

However, it is unlikely that the growth will be “explosive”. Most likely, it will be a few percent per year. Therefore, a significant impact on the primary real estate market of Moscow and changes in the balance of supply and demand of labor migration to provide will not.

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