What will happen to prices for secondary housing in Moscow in 2024

What will happen to prices for secondary housing in Moscow in 2024
In 2023, there were noticeable fluctuations in demand in the capital's secondary real estate market. The beginning of the year was stable, but in the summer, due to fears of a rise in the key rate and rising interest rates on mortgage loans, buyers tried to quickly resolve their housing issue, having managed to purchase housing on more favorable terms. The second wave of increased demand occurred after the Central Bank raised the key rate in September. As a result, Rosreestr recorded an absolute record in demand for secondary housing in Moscow. Despite the waves of demand, prices on the finished housing market remained stable and did not show significant growth.
Reduced prices for secondary housing.
Now the main and defining trend for the secondary market is a high key rate, at which the cost of mortgage loans has increased significantly, and rates start at 16% per annum. If the key rate does not fall in the near future, then demand on the secondary market will seriously decline, which will lead to an increase in supply and, accordingly, to a reduction in prices by up to 10%, experts note.
Analysts predict first stagnation of prices on the secondary market, and then their gradual decline, until mid-summer by about 10% from current values. If the key rate continues to rise and the cost of mortgage loans rises, the reduction may be more significant - at least 15%.
The secondary real estate market, unlike the market for new buildings, does not react so quickly to a decrease in buyer activity, so you should not expect an immediate drop in prices. If lending conditions do not change before spring and mortgages for finished housing do not become more affordable, then prices will begin to decline by about 1.5% per month, experts say.
Market mechanisms work clearly; if there is a lack of demand, sellers are forced to lower prices. There is no other way to sell when demand is low. In this case, the market will test the purchasing power of the population, and the price will drop to the level at which the market perceives it as fair, experts explain.
Under what conditions can prices rise?
Experts predict a different development of events if the Central Bank reduces the key rate and interest rates on mortgage loans on the secondary market also decrease. It is predicted that with a decrease in the key rate, the reduction in demand will slow down, and prices will increase by 10–15% until mid-2024.
Experts do not exclude the possibility that the stated prices in advertisements for the sale of apartments in Moscow will remain at the level of the end of last year. Real transactions will take place for completely different money, after the owner gives the buyer a discount.
In the current conditions, the average discount for the sale of secondary housing in the capital is gradually growing. At the end of last year it was at 3.7%, and at the beginning of this year it is approaching 4.5%. If the status quo with the key rate and interest on mortgage loans continues to be maintained, the number of transactions with a discount and the discounts themselves will only grow, experts predict.
An expensive mortgage, according to experts, will lead to increased competition for a real buyer in the secondary market, and owners who need to sell an apartment as quickly as possible will increase the discount.
According to analysts, we should expect an increase in the discount on new apartments (in recently commissioned new buildings), where private investors have not calculated their financial capabilities and will be forced to sell at a discount in order to cover their obligations to banks.
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