June Respite: Has the housing market slump stopped
The volume of apartment sales in new buildings in Russian cities with a population of one million (plus Tyumen) in June immediately increased by almost 16% compared to the previous month. It is noteworthy that this happened after five months of an extremely apathetic market. The growth turned out to be uneven: Krasnodar and Moscow are among the leaders. Despite the impressive figures, experts warn that it's too early to talk about a market recovery: the growth was largely due to seasonal factors, as well as discounts and installments. What will happen to sales and housing prices and how the Central Bank's policy will affect them is in the Izvestia article.
According to the study bnMAP.pro In June, 17.86 thousand lots were registered in 17 major cities. In Moscow, the growth was 8.2%, and in Krasnodar — 25.4% at once. St. Petersburg turned out to be one of the outsiders, with a 17% drop in sales by May. The total lot area increased by 18.1% in June to 840.6 thousand square meters, and the average lot area also increased from 47 to 48.4 square meters.
Fewer deals, higher prices
All this is in stark contrast to what was happening on the market in previous months, when the volume of transactions was steadily falling. According to the same data bnMAP.pro According to the results of January – May, 23.6 thousand transactions were concluded in Moscow in the primary housing market, which is 5.6% less than in the same period of 2024. New Moscow sank more, by 12.5%. Smaller cities looked even more depressing: for example, in Novosibirsk, the drop in the number of lots exceeded 30%. In some cities, such as Kazan, the drop in purchases was offset by rising prices, so the market even grew in monetary terms (excluding inflation).
The key reason for this was the cancellation of preferential mortgages, without which buyers decided to focus on the "secondary". It costs much less, and the chances of buying something with your own funds or with a small loan are much greater. Market trends have raised concerns among developers and led them to talk about the prospects for various measures to support developers.
Has anything really changed in July, or is it a fluctuation? Alexander Ivanov, a leading analyst at the federal company Floors, says that the calendar factor is primarily the issue.
— The May buying activity in the real estate market is lower and commensurate with the January figures due to the large number of weekends and holidays. Therefore, according to our estimates, there was no miracle in the primary housing market in Russia in June this year: although demand increased relative to what it was in May, it remained at the April level," the expert stated.
Kristina Gudym, an analyst at Finam, believes that this growth is due to several factors at once, primarily the seasonal revival of the market, as well as sales promotion through discounts and installments, which developers are actively implementing, especially in Moscow. In addition, the recovery may be related to expectations of changes in preferential mortgages, which could prompt buyers to accelerate their decision-making.
In turn, the head of "Cian.Analysts" Alexey Popov, referring to the statistics of his service, does not see an excessively sharp increase in sales — in June they sharply decreased to the average from February to May in Moscow and St. Petersburg, although they increased in other million-plus cities.
— In February – June, the number of purchase and sale agreements fluctuated in a narrow range. For the worse, May stands out, whose figures were affected by seasonality (demand is traditionally 10-12% lower this month), the production calendar (with two almost non-working weeks), complicated by logistical difficulties at the end of the first decade. The picture was not particularly joyful in May, but for obvious reasons listed above. In general, sales in the first half of the year turned out to be higher than market participants' expectations," the source told Izvestia.
According to him, the 13% growth in cities with a population of one million corresponds to the recovery of the market after a local decline in May. If we recalculate the absolute figures by the number of working days, then the positive monthly dynamics is almost invisible.
Everything is in the hands of the Central Bank
Alexander Ivanov attributes the further development of the market situation to changes in the monetary policy of the Bank of Russia.
— Now a lot depends on what decision the Central Bank will make regarding the key rate at the next meeting, as well as on possible restrictions on family mortgages in terms of purchases in the region at the place of registration. If the regulator continues its policy of reduction, it may gradually begin to restore demand in the secondary market, which will have a positive impact on the segment of new buildings. Now, some of those who are interested in improving housing conditions are either unable to sell their properties quickly due to reduced demand and are forced to postpone the purchase of a new apartment, or they use high deposit rates to accumulate capital, the expert points out.
In his opinion, both of these factors reduce consumer activity in the housing market, however, a further reduction in the key interest rate may become a catalyst for restoring demand. Such a positive scenario cannot be ruled out, and then by September or October, we can expect the start of the implementation of accumulated deferred demand, which will add 5-10% to its current value.
According to Alexey Popov, a significant change in the trend is possible only with a steady reduction in the key interest rate and the return of mortgage market conditions to the range of 14-15%. The probability of this happening this year is not too high. By the end of the year, the expert expects a decrease in the number of transactions by 15-20% in annual terms and an increase in supply prices at a level slightly above inflation (+10-12%).
In turn, Kristina Gudym believes that the jump in June looks like a local and situational one — rather, a surge in activity against the background of certain factors.
— By the end of the year, much will depend on the policy of the Central Bank and the state of mortgage programs. If preferential mortgages are curtailed and interest rates remain high, a second decline in demand is possible," she notes.
Thus, the real estate market will, according to general observation, continue to be in a state of stagnation. Certain hopes are associated with a reduction in deposit rates, with the expectation that these trillions will be gradually withdrawn from accounts and, at least partially, will go to the residential real estate market. However, so far there are no signs of such a transfer of funds: the vast majority of deposits either belong to people who have already solved their housing problems, or are not large enough even to become the first installment in a mortgage.
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