14 Jan Main real estate market trends in 2013
From the very beginning of 2013, it is clear that this year will be quite eventful and difficult for the Moscow real estate market. Last year, it was planned to adopt several fateful bills that could radically change the current situation. What development prospects and trends should be expected this year, we will try to consider today.
The main changes in the rental market are related to the adoption of a new law regulating the procedure for the delivery and payment of income tax, which came into force on January 1, 2013. The state does not lose hope to legalize transactions related to the lease of both residential and industrial premises as much as possible, and actively organizes various inspections, urging local district police officers and neighbors to be extra vigilant and help in identifying facts of illegal delivery of real estate.
As a simplification of the existing system for filing a tax return and paying a mandatory 13% of such additional annual income from this year, all owners of apartments and rooms have the opportunity to register their activities as individual entrepreneurship and buy a patent worth 60,000 rubles for the right to carry out such activities during a year. But, as always, this option turns out to be profitable and convenient not for all categories of people. It makes sense to buy such a patent only if the cost of the monthly rent exceeds the threshold of 38,500 rubles. Namely, starting from this amount, 13% of the payment will exceed the threshold of 60,000 rubles. For all other cases, the scheme remains the same. In addition, the government is actively discussing the introduction of criminal liability for the illegal rental of apartments and rooms to migrants who do not have Russian citizenship. So far, the bill has not yet been officially adopted, but the number of people wishing to rent their living space to stateless persons has begun to noticeably decrease, because no one seeks to pay a fine of 200,000 rubles. Just like formalizing temporary registration.
An equally expected event of today’s market is the official cessation of free privatization. This process began in Russia in 1990 and should have been completed at least 2 times in 2007 and 2010. The final date for completion of this process was March 1st, 2013. Such a change in the timing was due to the fact that in 2010 a massive program of providing housing for servicemen and war veterans began, who, of course, sought to register the property they received. Now the government is once again actively discussing the shift of deadlines to a later period. Bills are being considered, both proposing to extend the term only for certain categories of people, and for all. The maximum term already sounds like 2018. In his official speech, the President of Russia announced that the deadlines would most likely be extended, but the exact date has not yet been announced. Today, it is much easier to carry out a purchase and sale transaction if there is a standard package of documents for property. There are fewer problems associated with the execution and preparation of documents than in the case of social hiring, when residents registered in the apartment do not have the right to conduct any operations with real estate owned by the city. In this option, only direct exchange is possible, which is almost never used at the moment.
One of the most anticipated and unattractive developments in the segment of luxury real estate, represented by both Moscow apartments and country cottages, is the introduction of an additional luxury tax, which our government promised to legalize in the first half of 2013. The idea itself arose under the influence of the experience of other countries, which, as the crisis in Europe spreads, decided in this way to strengthen the state budget. Only a single opinion about what is a luxury, and what interest rate of taxation must not be introduced yet. There are numbers that determine the cost of luxurious real estate in the intervals from 100 to 300 million rubles, and the alleged interest rates range from 0.05 to 0.1%. In addition, the question of the application of such a tax remains open: real estate objects will be taken into account separately or there will be summarizing all objects owned by one owner. In general, on this bill there are currently more questions than answers to them and official information. If such a law is nevertheless passed this year, it will most likely lead to some reduction in demand in the luxury real estate market, especially among buyers who consider this purchase as an additional investment.
It is interesting that it is in the elite real estate segment that mortgage lending has been successfully used, which allows you to buy such real estate if you have 10-15% of its final value. Such attractive lending conditions make it possible to buy elite Moscow and suburban real estate not only for large entrepreneurs and top managers, but also for middle managers. Leading officials of major Moscow real estate agencies also point to a trend that began as early as the end of 2011, when some owners of luxury real estate began to sell their homes and acquire real estate abroad, transferring all their main monetary assets there. While this process has not yet become widespread, it continues to persist in today’s luxury housing market.
But if the segment of luxury real estate is not massive and affects the interests of a small number of residents of the capital, then the segment of affordable economy class housing is in stable demand and all changes related to it directly affect the situation with the Moscow real estate market. Buyers and owners of apartments in this segment are looking forward to the planned opening of several new metro stations at once, as well as the completion of the already protracted road construction. All these events were officially announced at the end of last year, which could not but lead to an increase in prices for apartments both in new buildings and on the secondary market in those areas where new stations will be opened. This especially affected the districts of Kotelniki, Zhulebino and the city of Lyubertsy. Here, the appearance of the metro was expected for a very long time, because the problem of transport accessibility was the main sore point of the area, which scared away potential buyers.
At the end of this year, it is planned to open three metro stations in this direction at once. This has led to the fact that the cost of apartments in houses under construction, which will be located in close proximity to new stations, has increased from 15 to 30% since the beginning of the year, depending on the stage of construction and the distance from the future metro. In general, last year, when the long-awaited Novokosino station was opened, showed how prices can change in the once unattractive areas located outside the Moscow Ring Road, with the advent of convenient transport accessibility. Now the prices for apartments in Novokosino are almost equal to the prices in the Novogireevo and Perovo districts. At the same time, apartments in new modern houses with improved layouts and additional square meters are becoming much more attractive than their “old” small-sized counterparts in the sleeping areas of cities located within the Moscow Ring Road. Faced with the choice of buying a spacious two-room apartment in a new house built in the Zhulebino district, or a small two-room apartment in a five-story panel building in the Vykhino district, especially in light of the planned opening of a new metro station, buyers are increasingly choosing the first option, subject to the same financial costs. The construction and reconstruction of roads does not affect the majority of buyers in this segment as much. Rather, it means the end of the inconvenience associated with construction work.
This year promises to be quite difficult in terms of numerous approvals and document flow for developers and construction companies engaged in the construction of residential complexes on the territory of New Moscow. In connection with the final transfer of a number of territories to the metropolitan department, it is necessary to redo entire projects and permits that passed according to the norms of the Moscow region, but are unacceptable according to the norms of Moscow. This inevitably leads to a delay in the construction of new facilities. Collecting a package of documents for obtaining an official building permit is not so easy now, and, therefore, the sale of apartments in such unbuilt and unapproved residential complexes is temporarily suspended. At the same time, experts note that in 2013 a clear trend is expected to move economy-class real estate and its potential buyers to the territory of New Moscow, where housing prices remain much more affordable than in the developed areas of old Moscow. Here, about 82% of buyers buy apartments for themselves and their families, and only 18% make such a purchase in order to receive additional investment from renting out a future apartment or reselling it. At the same time, in order to invest money, they mainly acquire one-room apartments, which continue to be considered the most liquid on the modern real estate market in Moscow and the Moscow region.
Experts cannot give an exact forecast of price growth for secondary housing and new buildings during this year, but most of them estimate price growth in the range of 7-12% at the end of 2013.
In addition to the existing supply and demand for standard apartments and country houses, in 2013 there are more and more buyers who are looking for non-standard options for comfortable housing. One of such novelties of the real estate market promises to be a project for the construction of business-class family real estate, which is being built in the Mytishchi region. It provides for the construction of modern houses with transformer apartments, the layout of which can be changed depending on the change in your marital status and the appearance of children. Particular attention is paid to the availability of accessible infrastructure, underground parking and ensuring the safety of adults and children. Also recently, such “substitutes” for our usual apartments as apartments, lofts and townhouses have become popular. These new types of residential real estate for the Russian market immediately found their buyers. Several such projects are being completed this year.
In conclusion, it is also worth noting that in modern Moscow there is a shift in the main demand for real estate segments such as comfort and business class apartments.
So, 2013 promises to be quite rich and varied both for the real estate rental market and for the sale and purchase market.