Why suburban real estate market lags behind, when prices reached crisis level?

08.11.2010 11:10
Why suburban real estate market lags behind, when prices reached crisis level? Results 2 years after the onset of the crisis brought experts at Blackwood. In our material, you'll learn about why the suburban real estate market is lagging behind on a couple of years from a city where property prices have reached pre-crisis period in which real estate is worth investing today.

Olga Shirokova, director of consulting, analytics and research, summarizing the past two years, resulted in a comparison of market behavior during the recent crisis that occurred in the country 10 years ago in 1998.

In the process of comparing data, it was noted that the prices during the first crisis had fallen by 45% during the second - only 36%. But this period of market recovery to a state of pre-crisis levels predicted approximately the same: 3-year market as a whole will need to return to its original state. In a segment of real estate, this process can be quicker, and the market will recover in 2 years.

The difference in speed of market recovery is due, according to Olga Shirokova, there was no reason for the abrupt increases in property prices that occurred after the 1998 crisis. Then, greatly influenced adopted Federal Law № 214 "On Participation in the joint construction. It was he led to a sharp rise in prices, which reduced the recovery time, despite the fact that property prices in the crisis fell by almost a factor of 2. In the current situation, in the absence of these factors influence the market will warm up much slower.

During the description of general trends in suburban real estate market was marked displacement of New Riga highway with leading positions. This was due to promote the sale of plots without a contract, which allowed eknom-class to take a more prominent position, and advanced Simferopol highway on the first row of suburban areas that are in demand.

during the crisis was the failure of seasonal growth in demand, as well as a sharp drop in demand during a seasonal slowdown of consumer activity
Uvelichitvo the crisis was the failure of seasonal growth in demand, as well as a sharp drop in demand during a seasonal slowdown of consumer activity
If you look closely at the graphs of the demand for real estate market of Moscow and Moscow region, it may be noted that during the crisis was the failure of seasonal growth in demand, as well as a sharp drop in demand during a seasonal slowdown of consumer activity. At the same graphs show approximately the same trend in the market in the city and in suburbs.

However, it should be noted that in the spring of 2010 on urban real estate market there has been significant growth in demand. According to Olga Shirokova - an implementation of the pent-up demand that has occurred during the entire crisis period.

Questions about whether to invest now in the real estate segment of the economy Olga Shirokova replied that the feasibility depends on the period of investment. In her opinion for investments for a period of five years in facilities that are built now, you will receive investments from investments. And if we consider the longer term, it must be more risks. There is also the prospect of displacement of an economy class on new territory, perhaps beyond the Moscow Ring Road. In this case, objects that appear on the market in today's days, can play at a price that will be built.

Oksana Diveevo, director of sales of urban real estate, said that demand for new buildings is now higher. According to statistics, transactions carried out by a company in the market of elite housing, and housing business-class order of 60% of transactions with new buildings. The most popular items are worth about 10,000 dollars per square meter.

This is because developers are more keenly responsive to changes in the market, as lower prices and a change of planning in construction sites. And if the pre-crisis period of constant growth of prices on the market derived two-bedroom apartments, footage of which is 130-140 square feet, now on the market, developers have once again began offering a flat area with a two-bedroom layout. Investors today, according to Oksana Diveyevo, not those who are waiting for earnings to 20% of the invested funds, and want to preserve the funds available.

Oksana also noted the return of the mortgage. The level of demand for mortgage lending, as well as the level of interest rates offered by the bank, has not yet reached its pre-crisis levels, but buyers are showing more interest in the possibility of acquiring real estate with borrowed funds.

Choose a builder today, with this must-focusing on its reputation
UvelichitVybirat builder today in this must-focusing on its reputation
Choose a builder today, with this must-focusing on its reputation. Oksana Diveevo commented as follows: For a complete set of documents, even all the relevant rules and regulations spelled out - is not enough. Need to be able to look at previous projects completed builder. The only way to understand - how quality of communication will be held in the house, what materials will be used.

For investment today is in the best possible option when construction of the facility has already begun, and the house on the 1-2 floors already built. And the price is around 8-12 thousand dollars per square meter. It is natural to focus on many other factors (location, speed of construction, etc.).

On the reconstruction of suburban real estate market said Timur Saifutdinov, managing director of residential real estate unit at Blackwood. He noted that the recovery rate of a country market significantly lags behind the recovery in demand for urban real estate. The main reason is more risk when buying suburban homes.

The biggest demand now ready to enjoy the objects on offer are now rather limited. Also, consumer demand switched to the secondary market suburban housing.

Has a tendency to not allow developers to quickly complete the ongoing projects, and even more to start new ones. That's why suburban housing market recovery will lag on a 2 - 3 years. On the question of when the possible restoration of suburban real estate market, Timur said that we can consider the years of 2013-14, as possible in order to say that prices have risen to pre-crisis level.

Timur also noted the growth of settlements, implementing land without a contract. Moreover, increasing not only the quantity but also the proximity to the capital. Most active in this regard is the highway 2, where plots without a contract offer has shifted from 100 to 80 kilometers from the capital, respectively, increased slightly and the price of such a proposal. If we talk about business-class, and Novorizhskoye highway, is the favorite in this class, also increases the number of sentences without a contract.
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