Real estate market: if to invest - do it now The situation on the real estate market in Russia can be generally considered a reflection of its economy. Following the crisis and the fall in real disposable income the stagnation came to the real estate market: the pace of a construction of new buildings is reducing, and some projects are frozen until a better day. In these circumstances, the question-whether to invest or not in real estate is more timely than ever.
Perhaps, by the end of 2017 – the beginning of 2018 the primary trend on real estate market is the gradual increase of cost for the objects which enter the market first time. Thus, the developers are artificially trying to lift the market out of the stagnation and to recover increased costs, caused by a decline in construction as well.
However, the desire of sellers to kick off from the price bottom still meets with stiff resistance from the buyers whose income within 2017 has not turned to growth. In such circumstances, it has to be explained to the developers why in Moscow and other cities of our country the price for housing of the same quality and square footage can differ significantly.
The situation can't be saved even by the fact that during this crisis the value of the property in dollar terms has decreased significantly (on the secondary market there was the largest-ever drop and reached 47 percent). The fact is that by the third year of the crisis, only a small group of the population can boast of the availability of significant savings in foreign currency.
Nevertheless, the experts are optimistic and assume that if the fundamental shocks don't move the Russian economy, in 2018 the property market will return to growth. Unfortunately, his driver won’t be the purchasing power of the population, but the decline in demand. By the end of 2018 in the segment of economy housing we can expect the growth within 17 – 20 %, which is considerably above the rate of inflation.
Also in 2018, the gradual increase in the number of investment transactions is expected. Once in the midst of the crisis the market fell by almost half (to be precise, at 56%), experts cautiously suggest that in 2018, its performance will exceed $3 billion. The low-key optimism is expressed regarding the rental market as well.
However, even if these forecasts do not come true, the property market still remains very attractive for investors, working with "long" money. Despite the situation in Russian economy the real estate is always one of the most liquid assets. For sure, it requires a huge initial investment, but the returns from it is the same.
This market has a unique ability to recover after each crisis in spades. In 2008 – 2009, the fall in prices was about 20 percent, but by the end of 2011, the losses were completely wagered and the market continued rising. There is no doubt that the same will happen now.
At the moment the greatest appeal have houses in a small developing cities in the Moscow region, the value of which at the moment is still the minimum. If in 2018, the forecast growth of the real estate market doesn't become a reality, you can always get income in the form of rent from the same apartments.
As soon as the crisis in the Russian economy will start ceasing and the purchasing power of the population will begin to increase, the real estate market will recover inevitably, and those who have invested in its lower point, will have the opportunity to sell houses, apartments, land or commercial property which they have profitably purchased 2 – 3 years ago.
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