Secondary housing market: main trends and the future of the outgoing year

15.01.2011 00:04
Real Estate Market Analysis | Secondary housing market: main trends and the future of the outgoing year The passing in 2010 can surely be called the year of stabilization for secondary housing market

Dmitry Ovsyannikov, CEO IPOTEK.RU sure that the outgoing 2010 can safely be called the year of stabilization in the secondary housing market. Average prices for secondary housing market for 2010 increased by approximately 10%, which can be considered a good tendency to recover after the crisis.

Related article: Analysis of prices in the secondary residential real estate market in Kiev in January

Purchasing activity during the year as a whole has been fairly stable. In spring 2010, the state through HMLA actively stimulate mortgage lending. Rouble rates for the most interesting credit programs were below pre-crisis, and also below the psychologically important level of 10% per annum, which attracted a large number of borrowers.

Due to the fact that the spring activity in the mortgage market has increased, after it has risen and buying activity on the housing market. This led to the demand for mortgage loans, and then at a relatively low-cost housing has increased. Apartments, especially the relatively inexpensive "odnushki" and "kopeck piece, began to rise in price.

But in May, HMLA raises interest rates on loans for purchasing flats in the secondary market by about 2 percentage points. The rate has risen above the psychologically important level of 10%, and consequently, the demand has decreased. The matter was compounded unprecedented heat and smoke. Many buyers and sellers prefer to leave Moscow, postponing the decision of housing to less than a hot time. July-August and early September, came as a decline in demand and decrease supply.

In September and October 2010 there was a surge in buying activity associated with the implementation of pent-up demand, which was formed during the summer months. Active buyers in this period was in excess activity of sellers, which led to a slight increase in prices (less than 0.5% per month). By adopting the realization of deferred demand sentryabre-October for the beginning of the autumn rise in prices, many sellers were quick to raise prices on their homes. However, in late October, after the realization of pent-up demand purchasing activity began to decline.

Generally speaking, the end of October, is illustrative for understanding the future behavior of the market. At this time, identifies the major trends for the next six months - until about March. And the decline in demand in late October, shows that the wait should not so much growth, as a slight reduction in prices until new year (1-3%). In my opinion, and further, to about March 2011 is a small price drop will continue.

But in March, perhaps, the demand for secondary housing market improved. This is largely due to the reduction of the mortgage market. So in 2010, banks have been actively involved subprime borrowers, lower mortgage rates and mitigate the conditions for granting mortgage loans.

Thus, in recent years, several banks were quick to say about lowering interest rates. Although not without a little guile: some banks have published the "internal rate", which can only get loans to employees, presenting it as a reduction of interest rates. But some banks actually reduced the rates, though, and announced this reduction as a New Year rally.

If this trend continues in the future, we can expect increased demand for secondary housing market and, therefore, - and rising prices. And in this case can be observed a significant increase in prices. But - just one of many possible scenarios.

General Director of Real Estate RELAYT Oleg Samoilov believes that meaningful "price breakthrough" in the secondary housing market, which was expected and predicted the fall of market experts, either in September or October was not held. However, talk of an overall decline in prices, in my opinion, is also not quite appropriate. Rather, analyzing the market situation of this period, we can speak of the conditional stability of the price characteristics of the Moscow housing. While some segments of the present visible "narrow" Mixed trends, under whose influence, in particular, small and relatively inexpensive one-and two-bedroom apartments mainstream Expensive, but larger and more expensive items continued to lose a bit in price.

From the perspective of a global analysis of the current situation can easily be "cancel" on the impact of macroeconomic factors and not too high dynamics of recovery of the Russian economy after the crisis. However, in my opinion, the main reason for the lack of price growth is still more local, sectoral in nature. It lies in the fact that this year, market participants did not manage to re-run mechanism, efficient operation that provides almost constant positive price movements in the pre-crisis period.

The basis of this mechanism is not economics, and psychology. After all, there are few people who are under the influence of massive information "pump" on "buy today, or tomorrow will be more expensive will be able to maintain stability for a long time. But the crisis left in the minds of consumers their mark, largely through the development of rational thinking under the influence of which significantly increased buying power is not "news" on the manipulation of the "grab bag - departs the station!". Accordingly, the buyer acquired the post-crisis period willingness to soberly assess the prospects and, seeing no objective reasons for increasing prices, sellers resist the desire to go to the beginning of the next round "price fever".

It is known that during the crisis in the confrontation of buyers and sellers have the upper hand just sellers. This was reflected in the fact that despite many forecasts and expectations of the period, the global price collapse has not happened. Therefore, sellers are expected this year "catch up fear" to customers and the fall to start raising prices. However, the buyers, in turn, take a clear position, which was that "are ready to buy, but only at current prices. And this attitude has become an unpleasant surprise for the sellers. So while they are "hiding" and temporarily dying their appetites, have expressed willingness to parting with their property at prices prevailing at present.

As a result, the forecast increase in prices, which gave many experts in the spring and summer, in practice not be realized. However, it should be noted that forming a prediction, market experts were guided by previous experience. And this experience convincingly testified that the revival of demand leads to an increase in market activity, followed some time later will inevitably be the beginning of rising prices. It is for this scenario, the market out of all the previous downturns, which, without regard to the current crisis in my professional memory, there are three.

All the prerequisites to a repetition of such scenario existed and now: the market moved into an active state in the middle of autumn last year and this year set several records on the number of transactions. In fact, the current situation does not "missed" in the usual scenario and a surprise. This in recent history Russian real estate market has not yet been: we first met with the manifestations of such fierce resistance from higher prices being shown by buyers.

The current volume of transactions on the secondary housing market is quite sufficient for the normal functioning of the market. In addition, the activity of both sellers and buyers, in my opinion, can be estimated as rather high, although not up to that same level of prediction is quite noticeable. Probably higher activity in the current environment and can not be, since its inception to the beginning of rising prices. Under conditions of price stability, many buyers will keep the fence in hopes of lowering prices, or, at worst, to continue to improve the conditions of mortgage lending. Vendors in this situation also will not rush to enter the market, trying to still wait for higher prices.

By virtue of the fact that come autumn has fallen short of the forecast start serious rise in prices, it seems to me that the "traditional December rush" in the current year will probably not be expected. For him, there is simply no good reason: supply volume increased in autumn, prices also continue to "mark time". Accordingly, those consumers who need to solve their housing problems in the current year will be to solve them, and those upon whom so obviously "no drips", leaving that task to the next year, knowing that nothing catastrophic happens.

In general, the market I do not expect any significant distortions of supply and demand in the coming year. However, in some segments, they are quite possible. In particular, in the first half of next year is very likely saving countervailing price trends: keep the excess of demand over supply in the segment of low-cost mass housing, whereas in the segment represented by larger and more expensive facilities, the buyer will remain the key figure around which " spinning world. "

Based on the foregoing, I would venture to suggest that a significant change in the current situation of the first half of 2011 will bring. Today's price level provides a balance of interests both buyers and sellers. Accordingly, in the foreseeable future as the prospect of significant reductions, and a substantial rise in prices seems unlikely. Most likely, the rate of growth of prices in the whole market will be approximately the same rate of inflation.

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