Kazan housing market: new builds lose to old houses, while developers hold sales – Realnoe vremya

December 16, 2021 by No Comments

Flats have been going up in price for two years in a row, and a fall cannot yet be expected

Photo: Maxim Platonov

Amid a sudden rise in prices for new builds in the last months, Tatarstan residents have switched to the old and countryside housing market where the price for a square metre rose, though insignificantly, like that of new builds, Realnoe Vremya’s experts said. The real estate market in Kazan has shown a steady growth since last year, which is conditioned by a preferential mortgage programme, high demand and a lack of supply. On the eve of 2022, more significant segments of the market are obviously overheated, and at least stabilisation can be expected, but most experts assume the growth will go on. A fall in supply and a rise in inflation expectations are the key factors determining the market’s behaviour.

Big cities have shown steady price growth

The prices say that the explanation for today’s slower construction pace should logically be looked for outside consumer demand. We can remember that construction companies’ capacities aren’t infinite, it is impossible to incessantly expand delivery volumes. Also, we can recall the reduction in the amount of working migrants, which is a factor whose meaning cannot be overestimated in Russia.

According to Dom.RF, we can conclude that Russians have money and they are ready to invest it in real estate, moreover, deposits are under the pressure of not a high deposit interest rate, on the one hand, and growing inflation on the other hand.

Scheduled inflation in 2022 should be 4%. But even if the government manages to hold the growth of prices, it is necessary to understand that it is just the average number in the economy. The housing market has always been a sphere of increased inflation expectations, its growth will encourage Russians to invest money today more actively. Director of Etazhi real estate agency Marat Gallyamov also confirms this point:

“With the appreciation of construction materials, lower mortgage rates in a state programme, a deficit of workforce on construction sites, prices for new builds have soared. New builds have set a trend for growth, which has been followed by old houses and then countryside realty. All these segments have become more expensive. As for tendencies, here the second half of the last year set the pace when flats in new builds were actively sold. New builds have started to significantly lose demand to the old house market in the last a few months because of high prices and interest rates.”

Chairwoman of the Central Bank Elvira Nabiullina didn’t rule out that the …….

Source: https://realnoevremya.com/articles/6047-kazan-housing-market-new-builds-lose-to-old-houses-developers-hold-sales

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