Developers hid in a pit

Over the past 12 months, the volume of primary housing supply at the foundation pit stage in "old" Moscow has decreased by 7.4%, to 8.2 thousand lots. According to experts, the launch of new residential buildings occurred due to a drop in demand and tightening of conditions for issuing mortgage loans. How will the new trend affect the average cost of 1 sq. m of housing in the capital's new building market?

According to Ruslan Syrtsov, Managing Director of Metrium, by the end of May, 8,237 lots in 58 projects were presented at the foundation stage on the new buildings market of “old” Moscow. For comparison, a year earlier the figure was 8,892 lots in 65 projects. According to him, the situation by segment is as follows: in the mass and business class, the number of such offers decreased by 29.7% (to 2,390 lots) and 14.6% (to 3,678 lots), respectively. In the premium and elite segments, the supply volume, on the contrary, increased by 39.1% (to 1,518 lots) and 96.1% (to 651 lots), respectively.

"In the mass segment and business class, the number of starts has decreased due to the rise in the cost of project financing," the analyst explained. He recalled that both segments are heavily dependent on government programs, of which only family mortgages with stricter conditions and bank commissions have been preserved in Moscow. In turn, in the premium and elite new buildings market, according to Syrtsov, there is a rush. Wealthy clients are seeking to invest in reliable assets in conditions of economic uncertainty. "Therefore, developers of high-budget housing are less likely to postpone starts, although they are also forced to overpay credit institutions within the framework of loans. As a result, even in conditions of high consumer activity, the supply at the foundation pit is growing," the expert concluded.

"The supply volume today is actually lower than it was a year ago. Recently, both the volume of housing commissioning and the launch of new projects for implementation have decreased in the real estate market," confirmed Igor Sibrenkov, Commercial Director of GC "Osnova." In his opinion, the trend has strengthened due to the high key rate of the Central Bank and the rise in construction costs. "The high project financing rate for developers, the reduced availability of mortgages, which slows down the rate of filling escrow accounts, have a very definite impact on the dynamics of the launch of new projects," the developer added.

At the same time, he noted that in mass segment and business class projects at the foundation pit stage, as a rule, favorable prices are presented. In connection with this, the most affordable lots are starting to be washed out, which also affects the overall picture of the market.

According to Syrtsov, at the beginning of June, mass new buildings at the initial stage of construction increased in price by 6.4% over 12 months (to 336.8 thousand rubles/sq. m), business-class complexes became cheaper by 1.5% (to 449.6 thousand rubles/sq. m), premium projects became more expensive by 19.6% (to 769.7 thousand rubles/sq. m), elite projects increased in price by 21.9% (to 2.024 million rubles/sq. m).

Currently, among the projects at the foundation pit stage, 13 belong to the mass segment, 28 to the business class, 9 to the premium class, and 9 to the elite segment. “The share of premium new buildings in the overall structure of supply in “old” Moscow is only 14%,” emphasized David Khudoyan, CEO of Optima Development. In turn, at the foundation pit, this figure, according to him, reaches 18.2%. First of all, this is due to the increased demand for premium new buildings. The income level of the target audience of the premium segment allows them to successfully switch from mortgages to installments. The share of transactions using this marketing tool exceeded 40%, and since the beginning of 2024, the figure has increased fourfold.

According to experts, the recent trend of reducing the number of new buildings at the initial stage of construction will continue to gain strength within the Moscow Ring Road. Since the refusal of new buildings helps developers, especially from the mass segment, to maintain prices for new apartments and flats at an acceptable level even in conditions of declining demand.