The rule of "build less - prices are higher" in Moscow no longer works: experts

By midsummer 2011 the real estate market of Moscow and Russia was again at a crossroads, as, indeed, the entire macro-economic situation in general. The first half of 2011, it would seem, finally convinced everyone that the crisis was over, a REGNUM correspondent was reminded of the analytical center IRN.ru. For such a point of view, there are many formal reasons: the almost twofold increase in oil prices since last summer, and the strengthening of the ruble, and increasing the purchasing activity of the population, and improving the overall mood of the business community. But at the same cost per square meter as one of the most reliable and conservative indicator of economic condition of society for some reason do not hurry to support all this optimism, leading to serious reflection, ascertain professionals.

According to analysts IRN.ru, for the first half of 2011 the dollar prices of real estate in Moscow, added about 10%, topping the mark of $ 5,000 per square meter. The index value of housing costs in June (average per month) amounted to 4986 dollars, at the end of the month (last week of June) - 5025 dollars. However, if we take into account that the dollar has lost over the six months about the same 10% (30-31 rubles per dollar at the beginning of the year to 27-28 rubles to fly), there is no real growth in the remains, said the study's authors .

The average level of prices for Moscow housing fluctuated throughout a semester within the band 132-142 thousand rubles per square meter. Moreover, the experts add, in the corridor of the capital cost per square meter is already in the early summer of last year, showing no steady trend of growth, in contrast to the period from summer 2009 to summer 2010. It should also be noted that sustainable growth and real estate shows no regions of Russia. Despite the formal increase in prices a little, in fact, continues to stagnate and global real estate market.

"What price are more significant - in dollars or rubles? Do we need to ascertain the presence of growth in real estate prices in Moscow and Russia, or to claim that growth in general and not the entire year and the market stagnates? Simple answer to difficult, - the IRN . ru. - Speaking of, for example, an increase in oil prices almost doubled (from 60-70 dollars per barrel last summer to $ 127 at the peak of the spring), we mean the growth is in dollars, not rubles. And comparing dynamics of real estate prices in Moscow and Russia and other macroeconomic indicators, correctly assumed the dollar price. However, immediately catches the eye, which is almost twice higher prices of oil and 10% increase in cost per square meter is clearly not correlated. IRN.RU Analytical Centre is no longer repeatedly pointed out that a direct link between oil prices and property prices are not available ".

If you talk about pricing for those who are going to buy an apartment in Moscow or the Moscow region, in this case indicative of ruble prices, though often the Moscow real estate is sold for dollars and the euro, added the study's authors. But in terms of consumer demand and the level of solvency of the population ruble prices show that grow nowhere else. However, there are certain segments of the real estate market in which prices denominated in the last six months have shown steady growth, but they are few. First of all, it's new buildings in Moscow and Moscow region economy class, which over the year have increased in price 10% -15% -20% even in the absence of an explicit general market growth due to advancement of construction, infrastructure development, neighborhood, and often record-low initial price.

If we talk about price movements in the districts and districts for the first half of 2011 as a whole, the more added value in still relatively cheap sleeping areas and districts. Thus, the leaders of growth in South-Eastern District, North-Eastern District and all areas outside Moscow. Among the areas of: Novokosino, Kosino-Ukhtomsky, Kozhukhovo, Printers, Teply Stan, the Ryazan Avenue, Kurkino, Molzhaninovsky, Ostankino, Rostokino, ENEA, Novo-Peredelkino, Vnukovo, Medvedkovo Zhulebino, Nekrasovka, Marino, Kapotnya and others. At the same time an outsider was the Central District and the North-West District and Northern District. Prestigious and catching up the center of Moscow at the price of housing and the Western District of South-West district - in middle positions. Among the outsiders for the district of Moscow in the 1st half were Polezhaevskaya, Jogging, Tverskaya, Pushkinskaya, Chekhov, Mayakovsky, Okhotny Ryad, Kitai-Gorod, Kuznetsky Most, Lubyanka, the Revolution Square, the Theater, October, Dobrininskaya Paveletskaya, Serpukhov, Baumanskaya Basmanny, Don, Leninsky Prospect, Shabolovskaya and others.

Now it is almost equally possible to implement both optimistic and pessimistic scenario in the real estate market of Moscow, Moscow region and Russia. And the outcome will depend even on the events of the real estate market, but on the macro-economic vector, analysts said. "Take for example the drop in housing construction in Moscow, which in the past and this year is a record character, even when compared with the period of the nineties and the 1998 default. And what is the reaction of prices? No! With such reduction proposals of new buildings on the market in 2001-2008 years prices jumped to at times, and last year in rubles no growth in U.S. growth - is negligible, - the IRN.ru. - Moreover, after high-profile ban on construction of housing within the TTC last spring everyone was expecting that the other new buildings shoot up in price, in a hurry to raise the offer price. What is the outcome? Central District, 1H outsiders on the increase in prices, inferior even to residential districts and regions outside Moscow, a segment of modern monolith-brick houses, too. "

"Rule" build less - prices are higher "in Moscow is no longer working!" Even before the crisis began in 2008, nobody could have predicted that the volume of construction in the capital will be reduced so much. As, however, few believed that Moscow's real estate may fall in value. But the fact is that now the volume of construction in the capital three times lower than before the crisis, and a half times lower construction volumes in the whole country, and housing prices do not hurry to grow up to pre-crisis levels. And the reason is quite obvious: real estate found itself in the limit of price elasticity, divorced from the real capacity to pay the bulk of the real buyers, even if the mortgage. So even if you do not build, it will still be able to buy only one and it would be enough for the proposals of the secondary market, "- noted the study authors.

Further price increases may occur not at the expense of domestic real estate market factors, such as: pent-up demand for housing, consumer preferences and supply reduction, but largely only due to external factors, experts say. Prices for oil, metals and stocks rose for the last 2 years, not because these companies have become more efficient work, and for the extraction of oil workers have to pay twice as much, but because governments have poured into the financial sector a huge amount of liquidity. America is actively printing dollars under the auspices of the quantitative easing (QE), Europe does the same thing in the form of loans and debt restructuring of the southern countries of the bankrupt. Russia has pumped liquidity in a similar way the banking system due to the stabilization fund reserves.

And if these processes continue, there will be increasing inflation commonplace due to the growth of money supply, then the property goes up in price next to it. Moscow real estate has the potential to further add to costs at the expense of cross-flow of investment money from the stock market correction in the wake of the latter, as well as through the development of campaign money. Therefore, the experts predict that the housing in Moscow and the Moscow region for the coming year has a chance to grow by another 15% -20% -25%. But, as already noted more than once, like higher prices at the time frenzy, the investment money and to limit the ability to pay the real demand is fraught with a subsequent drop in prices and stagnation, as has already occurred in 2007, after record growth and after the 2005-2006 crisis in the late 2008 and in 2009.

Have resolved for these 3 years the very problems that gave rise to the crisis? Whether productivity has increased, there are companies and officials to work more efficiently, and the population - live better and earn more? For many direct and indirect indicators - no, analysts say. Problems are not solved, and the "hidden under the carpet." So, it is necessary to stop printing money to support another, and all can once again roll down, including oil prices, and foreign investment in Russia. But in this scenario will dry up and the amount of liquidity in our country, and budget surpluses, which can accumulate the real estate market of Moscow and Russia to increase the cost per square meter.

According to experts of the analytical center IRN.ru, in the current situation, the pendulum may swing back in one or the other way. And the understanding of the scenario in which development has gone, there will most likely closer to fall and it will be largely due to macroeconomic vector. If in the wake of the printing of new money and new programs under the auspices of saving even more indebted, and acceleration of inflation will increase the price of everything, do not fall behind and real estate. If the program does not receive financial support for the active development and will be phased out, all markets, as well as real estate is likely to go in hard with the stagnation of a magnitude correction in prices.