In Kiev, prices continue to fall in price even faster

09.03.2011 12:29
Real Estate Market Analysis | In Kiev, prices continue to fall in price even faster In February, impossibly high for the majority of Kiev bid prices for housing declined in virtually all market segments, and increased speed of cheaper apartments.

Toward the end of the month the market has come alive - a marked increase in the number of calls, hits and instruments of deposit. In March, is expected to further reduce the cost of apartments, but only provided that the price reduction will be a point, not mass character, wrote Ugmk.info.

Related article: The greatest demand in Kiev are «three rubles»

In February, the real estate market in Kiev there have been visible improvements, and it seems that these trends will be further developed. This conclusion is pushing, in particular, the analysis of bidding in view. Prospective buyers, though, and wait for further general reduction in prices, but with substantial concessions, many sellers are willing even now to acquire property.

According to our data, in February sales prices were on average 16.2% below the average prices of the proposals in their respective market segments. How true is the above percentage reflects a discount obscherynochnye trends - say quite difficult. First, in every market its own characteristics, its supply and demand, and secondly, data on the size of the discount received on the basis of a very small number of transactions (hence, the statistical error is high).

Approximately 75% of February sales account for economy-class apartments costing up to $ 90,000. Minimum sale price was $ 40,000 (one-bedroom apartment of 19.7 square meters. M in the pre-fabricated house on the street. Bogatyrskaya). The most expensive of the known area of 167 square meters of apartments. m was sold at Obolonskyi Lipka for $ 350,000.

Moreover, judging from the available list of deals, most buyers chose an apartment with repair (often - with a very high quality). At the same time in the list of transactions, the share of apartments in need of serious repair, and the share of apartments, requiring cosmetic repairs.

We believe that this is not accidental. Selection of apartments in recent months, large enough and each buyer could not hurrying to pick up Taipalsaari and material possibilities. As a result, some bought an apartment for repairs, and even furniture, especially not overpaying for them, others felt that more profitable to buy the "killed" the apartment and make it repairs to your liking.

Hard to say which of them made the right choice, but it's worth noting that sellers who have made costly repairs before the sale, under the present circumstances do not always turn out to be a winner. The fact that the repairs in recent years have not become cheaper (in many cases they are even more expensive). The cost of real estate has declined significantly. Because there are cases where people have spent on repairs, for example, $ 12,000, and the apartment could sell only $ 8,000 more expensive.

Although there are opposite examples. Here, much depends on market segment and specific features of the apartment. In new buildings and "killed" flats held presale repairs often justify themselves (of course if they were carried out correctly, using appropriate technologies and taking into account market trends).

Indices of cost of housing in Kiev are calculated based on actual database of real estate portal real estate www.domik.net (that is, on the basis of price offers), but take into account the sale price and the size of trades, as well as the dynamics of their change in prior periods. In this price information is given either in dollars or in UAH per square. m

In determining the indices used mathematical methods of approximation, which, while delaying the transition process but allow smooth curves and highlight the trend (the main dependence of price changes). Unlike forms of the curves on the graphs of the indices IKm (USD) and IKm (UAH) due to currency fluctuations that took place in a particular month.

Analyzing the data presented in these tables, it is necessary to bear in mind that in early 2011, we changed the methodology for the formation of the samples used in the calculations.

The main innovations are: tightening the rules of selection of objects involved in the definition of statistics while expanding the number of information sources. In particular, in determining the statistics were used suggestions made to the "Announcements" real estate portal www.domik.net (before such proposals are not included).

As a result, the sample size increased significantly (and this reduced the statistical error). But it is more complicated screening ads containing false information. In addition, changes in methods of formation of the analyzed samples is associated with transient, difficult to compare statistics for different periods. Because until the transients associated with changes in methodology, we have decided to waive such a comparison.

Mortgage market


Ukrainian banks, faced with the problems of efficient allocation of funds raised, are increasingly focused on the resumption of mortgage lending. Reduce rates, easier credit conditions, are actively seeking approaches to potential borrowers. Over the last year mortgage rates in national currency decreased by 4 - 5%. So, if in February 2010, the average interest rate on loans for housing in UAH was 24.43%, in February 2011 it was 19.10% (as of Prostobank Consulting).

Representatives of the banks are increasingly turning to real estate agencies, explain features of loan programs, please send them to customers (primarily those who are to improve housing conditions lacks the relatively small amounts).

Particular result, these measures have not yet given. Despite the decline, bank interest is still very high; mortgage terms are too tough for most of our citizens. In addition, problems with repayment of previously issued mortgage loans from banks pushed many potential borrowers.

In 2010, the average monthly volume of new loans, "households" on the acquisition, construction and reconstruction of real estate, amounted to only 188 million USD. In this case, the total debt "household" to mortgage loans from month to month, declined.

Forecast for March 2011


We believe that in March, business activity will increase and the price index will continue its decline. Increase of business activity we associate not only with the traditional spring recovery of the market, but those trends were observed in February. Tired of the role of "observers" and unresolved housing problems, care for the many months of waiting the streets, houses and flats, buyers are increasingly entering the market with serious intentions. " True, virtually all of them fluctuate. But the fluctuations are often discarded when sellers agree to sell cheaper than asking for a similar apartment.

Sellers desire to draw attention to these buyers a lower price gives grounds to predict a general decline in prices. In this case, the rate of decline in prices in March is likely to increase. One thing is when sellers do not see any real buyers in the market (in this case the price they usually stick). And quite another thing when the market appears more or less real buyers. In this situation, sellers are reducing prices far more readily.

In the period of revival of the market such a scenario is possible. Provided, however, that lower prices would be "spot in nature." At a mass price reduction potential buyers once again become observers will be waiting for a sharp fall in prices.
Ugmk.info
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