Suburban buildings are difficult to sell

Moscow region on the third reduced sales of apartments in new buildings. The largest in the country the housing market shows signs of oversupply: building much more than citizens can buy.

photo: Mikhail Kovalev

The Moscow Rosreestr in February registered 6,09 thousand contracts of participation in share construction, which is 11% lower than January 2017 and 41% lower than the same period of 2016. The statistics did not surprise experts. The primary market of Moscow region is experiencing a prolonged decline in 2014. According to the Chairman of the Board of Directors of the company “best new Building” Irina Dobrokhotova, if two years ago, the area was was of 113.2 thousand kindergarten, by the end of 2016 — only 83,2 thousand

Consumer demand gradually flows from the suburbs to Moscow. “Previously less than 5 million rubles in Moscow, almost nothing was offered, now there are options of 3 million rubles. For example, a small Studio apartment in new low-cost projects,” — said the head of the company “IRN-Consulting” Tatiana Kalyuzhnova. According to experts, now most of the housing in the primary market is sold for 50-60 thousand rubles. per 1 sq m, which is actually equivalent to the cost of construction. To stimulate demand, a number of developers have already abandoned the traditional spring price increases.

Recall, according to Rosstat, in the suburbs annually is about 8 million square metres, or 2.5 times more than in Moscow and St. Petersburg. And the decline in consumer activity could become a serious problem for the construction industry in the region. More recently five of the companies building housing in the suburbs, recognized problem, reported the press service of the Ministry of construction complex in Moscow region. Now in the register 112 is problem of developers.

Interestingly, in a zone up to 30 km from MKAD, the third of the proposals have to five cities-leaders (see table), calculated in the company “MIEL-new Buildings”. Despite the moratorium and the limitation of construction in some major cities of the Moscow region’s concentration of construction remains very high.

Most buildings for sale in Khimki, where implemented from 9.6% of the total supply in the Moscow region (319,4 thousand sq. m.). Two years ago, the primary market of the city occupied 8.4% of the total offer (299 thousand sq m).

Another 6.9% of the proposals have on the United Balashikha and Railway, where together implemented 257,5 thousand square meters In the top 3 got a Krasnogorsk with a market share of 6.4% (212,3 thousand sq m).

In fourth place are Mytischi, the share of new buildings accounting for 5% of capacity of the Moscow market. Another city that is under active construction, — Lyubertsy (136,1 thousand sq m). The share offer is 4.1% of the total market size.

“Now the share of five of the leading cities accounted for 32% of the total deals in the Moscow region. It is quite clear that the leaders are the cities located in the vicinity of the capital, where there are rail links and convenient way to travel, which makes them attractive to buyers,” — said General Director of company “MIEL” Natalia Shatalina.

In her opinion, in the future the share of employees decreased due to limitations on the issuance of new permits for construction, introduced in early 2016. For example, the heading, where does a ban on new construction, it is clear that the measures taken give the result. In 2014, the primary market of Moscow (excluding Railway) were 5.1%, now only 3.1%. “Most likely, the developers will shift their interest toward the Train. Consequently, the trend that emerged in 2016, to increase the supply in the Railway will only be strengthened”, — concluded the expert.