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Real estate prices rise as supply shortage looms
Published: 03 August, 2010, 09:25
Edited: 05 August, 2010, 23:24
TAGS: Markets, Budget, Economy, Finance
Russian real estate prices are on the rebound, with the construction halt at the height of the downturn likely to push apartment prices higher as demand grows.
It seems the slowdown in Russia’s real estate market may finally be over. In the first half of this year alone, prices grew by 15 to 20% with an increasing number of transactions, after they virtually ceased during mid 2009.
“Most of the developers declare that their turnover is about 2-3 times higher than it was in 2009. So we could say that, on the basis of that, the demand is growing, and most of the developers could declare today that the prices are growing.”
The rise is seen in every single sector- from economy apartments to luxury homes.
In the part of Moscow where the city’s most expensive apartments are located, the starting price of one square meter tops $30 thousand. And prices are expected to rise even higher over the next year.
The economic downturn hit real estate by forcing developers to halt many projects and shelve more, at the same time demand has continued to grow, and the full impact of the downturn will only be felt when the projects aren’t there for tomorrow’s buyers.
Irina Kirsanova, Marketing director of Peresvet Invest says supply will not keep up with demand and that will push prices even higher.
“I believe the economic situation has stabilized. And it's again become very profitable to invest in real estate. I’m sure we will see further growth in demand as well as in property prices.”
The Russian development market feeling the after effects of the global financial, with this week’s purchase by VTB of a stake in builder DonStroy the latest of a series of bailouts for builders. Analysts say only an increase in the number of well-financed builders, committed to producing quality real estate, can keep prices stable.
02.08.2010, 17:01
New law puts light on retailers and suppliersFrom August 1 a new retail law has come into force, which is supposed to create competition. But Vedomosti reports many retailers are not ready for the new rules or are looking to bypass it. |
03.08.2010, 11:56
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Russians spending more abroadCitibank’s annual Russian’s spend abroad study shows that Russians are spending more money outside the country this year than they were in 2009. |
USA housing bust has made owning a home a lot more affordable -- but in some places, prices are extraordinary; you can buy a nice condo for less than the cost of a new family car.Some cities have dozens of attractive condominium listings selling for $50,000 or $25,000. There are some selling for less than a new Toyota Corolla. And these are not derelict hovels in crime-ridden communities: These homes are often in move-in condition and located in nice neighborhoods.One condo in Deerfield Beach, Fla., that sold for $115,000 five years ago now lists for $25,000. That's a drop of nearly 80%.Much of these price drops can be attributed to over development during the boom. Much of that came in Sand State markets such as Las Vegas Miami and Phoenix, where prices for all properties are have fallen precipitously. Dear Russian citizens, please, buy homes in here; you are always welcome.
It is just in the human nature to repeat the same mistakes all over again. Real estate markets in Japan, US, Spain apparently did not teach anything. Although the history always repeats itself, the question is how soon. The laws of economics are the same everywhere and eventually they prevail