Translated material
Real estate prices
Moscow authorities are trying to prevent the fall in the cost of housing in the capital
Apparently, the decline in prices for Moscow real estate, which for the population has become at least some kind of positive trend against the backdrop of a very difficult economic situation, is like death for city officials. At least yesterday, at a regular meeting of the Moscow government during a discussion of the city's construction plans for 2011-2015, the top leaders of the capital's metropolis, led by Mayor Yuri Luzhkov, could not contain their emotions and criticized analysts who foreshadowed a further drop in prices for city apartments . Mr. Luzhkov called forecasts “inviting not to rush into buying apartments” but to wait until the next reduction in the cost per square meter as disinformation.According to the head of the capital’s construction complex, Vladimir Resin, a disastrous situation has developed in the city, “fueled on the bad side by media reports that housing prices, including social housing, will suddenly fall by 50%.” As a result, Moscow construction companies, accustomed to super-profits, found themselves in conditions that were unviable for them - “they don’t buy housing, and the loans are extortionate.” Life for the builders, according to Mr. Resin, has stopped. “Where did this figure even come from? Such numbers simply cannot arise here. If this is social housing, then we can only talk about a few percent, and for it to fall by 50% is simply an incredible situation,” Mr. Resin is confident that there are no objective reasons for a further serious reduction in real estate prices. In addition, according to Mr. Resin, commercial developers cannot be left alone with the problem that has arisen in the construction market. “They are a huge help for solving social problems, and the city’s share is also included in this volume of housing,” he addressed his colleagues. “The authorities need to understand this situation and carry out explanatory work.” “No matter how much we want it, we need to face the truth and realities - now this (decrease - Ed.) is impossible, it will not be lower," the mayor dispelled the hopes of the townspeople.
The head of the complex of economic policy and development of the city, Yuri Roslyak, said that in general “there are no economic prerequisites for reducing prices,” citing the fact that the cost of housing includes construction costs and bank loans. The urgent need for at least informational fueling of demand for Moscow apartments even pushed into the background the project proposed by the Moscow City Architecture Committee for the placement of housing and other types of construction in the city of Moscow for the period 2011-2015. The program, which provides for the construction of 31 million square meters of housing through the massive reconstruction of five-story buildings, the development of industrial zones and the near Moscow region, was postponed for a month and a half. According to officials, if now “we do not stimulate the housing market, its acquisition, there will be no one to implement the program.”
However, “extreme” forecasts regarding the upcoming price decline in reality do not look so extreme. The day before, the media quoted well-known real estate market analyst Oleg Repchenko, whose forecast supposedly implied that capital real estate could fall in price by another 50%. However, clarification of this figure by the author of the forecast showed that it also includes the already occurring drop in prices, starting from their peak values last year. “We have to expect a decline, but considering that in the last months of last year the price has already fallen by 25-30%, there will not be such a sharp drop,” the head of the analytical center “Real Estate Market Indicator” (IRN) told Vremya Novostey. ) Oleg Repchenko. According to the forecast of IRN specialists, the decline in prices for metropolitan apartments within the range of 10-15% will continue until March of this year, after which a period of “price stabilization” will begin.
It should be added that it was not only Mr. Repchenko who predicted a significant decline in real estate prices. Developers, for obvious reasons, convinced buyers that there would be no reduction or it would be minimal. Now the city fathers are actively involved in this advertising campaign. The only strange thing is that their indignant voices were practically not heard during a period when real estate prices were growing by 50-80% per year. Now the market is paying the price for that speculative growth. And there is hope that it will acquire a more civilized appearance, finally turning from a market of monopoly sellers into a market of mass buyers. And if for this, costs, profits and kickbacks have to fall further, and the creators of the old market have to leave it, then a deep crisis will bring the long-awaited recovery of that industry, which was no longer possible to recover by any other means.