Dmitry Lebedev: “The demand for houses and apartments out of town has grown fourfold”

The expert on personal finance and real estate investment, Chairman of the Board of Directors of Basis Investment Company Dmitry Lebedev prepared a detailed material on current trends in the real estate market for “Rusbankrot” website.  What should Russians expect from the current crisis and will there be a sharp drop in the apartment prices?

They say if you want to imagine the future, look back at the past. From the experience of the previous major crises of 1998, 2008 and 2014, some changes in the residential real estate market can be predicted.

At the beginning of a crisis, multidirectional trends are observed as usual. Some people rush to buy real estate, seeing how Russian national currency is getting cheaper and, hoping to acquire a real asset, they get rid of money. The others stop selling the apartment, not willing to sell it for rubles and hoping for earnings in dollars. Still others cut the prices for faster sale because of the fear of collapse. The process, taking place right now, resembles a chaotic movement in different directions.

But then, according to the standard scenario, market activity quickly drops and almost stops. For several months, there are practically no buyers, and sellers have two options. Those, who have no need to sell the property urgently, hold the price or postpone the sale. Another, smaller part of sellers is ready to sell at a discount, but without advertising it, just considering the incoming offers.

Some people agree to a discount of 10 to 30%, so we may assume that a good time for real estate investors is coming, if they have free funds to buy real estate.

In the period of stabilization of the economic situation, when good news appears and business comes to life, the market begins to grow - slowly but surely. First, interesting offers are “washed out” and then prices start to rise slowly.

The demand for rental apartments and country houses will depend on the overall economic situation.

Now there is a migration of urban residents to out of town. The demand for houses, townhouses and apartments outside the city exceeds all reasonable limits - fourfold in comparison with the same period of the last year.

But this demand is temporary, as the most people rent the apartments for a period of not more than six months, although most of them will remain for a longer time. Under these conditions, many owners require and receive significant prepayments, up to six months. The rental price has also grown.

In the nearest future, I predict a decrease in demand for rental the city apartments, which will entail a slight decrease in the average rental price, but only for low-liquid, not very attractive apartments. In this market you need something to stand out: design, conditions, service or something, due to which the potential tenant will choose your apartment. In this case, it will be possible to maintain the pre-crisis rate.

When it comes to realtors, the professional market players, we can say that difficult times are coming for them. But at any rate, it will be easier to survive for them than for restaurateurs and representatives of many other businesses.

The activity in the real estate market will certainly go down, but it will not be zero.

What is more, the realtors are used to having inconsistent income. They have savings, as a rule, because from their own experience they know that the next deal may not happen soon. Some of them will leave this market and will look for jobs with a fixed salary. But this will only help to clear the market as the best specialists are in demand among customers. They will stay and continue to earn money, but probably less than usual.