2012 year: shall we expect new crisis wave on Moscow realty market?

On this occasion the VI analytical business conference named “Real estate, constructing and financial market in 2012 year” took place on the1st of December, 2011. Prominent analysts and economists gave the reports on the issue of real estate market tendencies in 2012 year. There are several points of view as for this issues which are set forth in this article in brief.

The 1st one: The crisis hasn’t ceased. The author of this message is Mikhail Khasin, the President of NEOKON Expert Consulting Company.

Grounds: the situation in the world macro economy becomes more and more strained. The money supply increases. After the emission expected in summer 2012 petrol will rise in price, inflation by-turn will increase. Lending rates will go up as well and developers will be confronted with difficulties in getting credits.

The 2nd one: we shouldn’t expect crises next year. The author of this message is the Head of analytical centre “Real estate market indicators” Oleg Repchenko.

Grounds: the rise of money supply will not result in the price increase which took place in 90th. It’s more likely that so called “beflation” will took place next year: only irreplaceable products such as petrol and gas will go up in price. As for realty realm only unique and highly prestigious places as Monaco and London will be marked by price rise. Prices for apartments for sale in Moscow and its area will not rise considerably. 

Tendencies

Besides the forecast regarding a new crisis wave probability the analysts denoted the following tendencies in real estate market in 2012 year:

• The deplacement of new constructing projects off Moscow Ring Administrative Road (MKAD). The increase of demand for Moscow area realty. Price rise will not exceed 8-10% in Moscow and 6-8% in Moscow area. 

• The competition between developers which will result in the constructing quality and infrastructure improvement. Next year ready-to-move renovated flats will be offered for the same price as shell-and-core ones this year. 

 
• About 30 new projects in central Moscow locations will be brought about in next 3-4 years in elite class segment (taking into consideration that only 4 projects were carried out the current year). Price index evolution is not to exceed 10% per year.

 • The increase of demand for studio type renovated apartments in Moscow and low-rise residential buildings in Moscow area will took place in economy class segment. 

 “Miel” company experts summarize the hypothetic assumptions: “in case there will be no global economical calamities the tendency of a moderate price rise will continue in 2012 year. The average offer price in Moscow is to make up 12-15 % and 7-10% in Moscow area”.