The real estate market in Russia (as in other developed countries) is changing quite quickly. Changes become especially unpredictable during periods of crisis. In such situations, market analysis is a complex task: prices and demand can swing both up and down.

Below IQReview provides a brief overview of the current state of affairs of the real estate market in the Russian Federation. This data is relevant primarily to those who are planning to buy or sell property in the next six months to a year.

History of creation and development real estate market in the Russian Federation

The real estate market in Russia is relatively “young”: it emerged only in 1990. In the middle of this year, the law “On Property in the USSR” expanded and began to include the concept of “private property.” In fact, the market began to develop on a massive scale only in 1992, when it began to be practiced.

As in any other country, the real estate market in Russia has had and has its own characteristic features. Initially they were like this:

Demand exceeded supply several times, and in large cities - tens of times.

Services were not as widespread as they are now and were generally unprofessional.

Housing prices were very low (for example, in 1995-1997, an average one-room apartment in Moscow could be purchased for $25-30 thousand).

Price formation process

The secondary market of Moscow (and other cities of the Russian Federation) was conventionally formed in several stages:

From 1990 to mid-1991. The stage of the “birth” of the real estate market in the Russian Federation, which is characterized by low and stable prices. Buying and selling at that time was not widespread - transactions were concluded relatively rarely (the population was not yet accustomed to innovations, and in addition, serious changes were taking place in the country). It was mainly migrants who sold housing; transactions were often made at the cost of construction.

From the second half of 1991 to the beginning of 1993. The secondary market is beginning to actively grow, especially in large cities. In less than 2 years, along with the number of transactions, both the demand and the cost of housing are growing. In certain periods, the price increase was 10-15% in foreign currency. Demand grew largely due to the rapid development of market relations and the creation of a new class of population - the “new Russians”. In large cities, wealthy businessmen and bandits actively bought real estate, stimulating both demand and prices. The first large real estate offices began to appear.

From the second half of 1993 to the end of 1995. The rapid growth that had emerged in the previous two years began to slow down, and the market situation became more stable. Prices also began to stabilize: if previously they were often set chaotically and were far from adequate (both up and down), then by these years the cost of living space began to be more influenced by factors such as the type of house, location, apartment layout , surrounding infrastructure and so on. It was at the end of 1995 that the Russian capital became one of the most expensive cities on the planet in terms of housing prices.

From early 1996 to mid-1998. The scale and prices gradually stabilized, becoming more systematic and thoughtful.

From the second half of 1998 to mid-1999. Due to the crisis in 1998, the sale of apartments slowed down significantly. Housing prices in dollars also went down.

Here are the approximate prices for Moscow “squares” (roughly average figures, apartments in residential areas):

end of 1993 - $400-600 per 1 “square”;

1994 - $600-900 per “square”;

1995-1996 - up to $1,200 per square meter;

1997 - $600-1000 per square;

second half of 1998 - $700-900 per square meter;

second half of 1999 - $450-600 per square meter.

For wealthier buyers buying homes in prime areas, prices were about 50% higher.

The most expensive and prestigious segment of the market began to emerge approximately at the end of 1994. Elite apartments began to be allocated primarily in Moscow and several other large cities. At the end of 1994, the average cost of 1 square meter of such housing in Moscow was about $2,500, and at the peak of prices (in 1996) it reached $4,000.

Current state

From 2010 to 2013, the Russian real estate market experienced stable, smooth growth. Both the demand for housing and the cost of living space grew.

Russian real estate market

With the onset of the crisis, growth slowed and a rollback began. There are several reasons for this:

Large investors lost the opportunity to receive “cheap” loans, which is why the pace of construction slowed down (and some of the projects started were frozen).

The real income of the population has dropped, which is why citizens began to buy less housing (both with and without a mortgage).

Mortgage requirements have become more stringent, making it difficult to take out a mortgage even for those who have enough funds to repay the loan.

The cost of building new housing has increased (due to the rise in the dollar exchange rate, which increased the prices of construction equipment).

These factors have led to the fact thatreal estate market (forecastwhich was consistently positive in 2010-2013) began to “fall”:

the level of sales of apartments in new buildings has decreased;

the number of mortgages taken out has decreased;

the total number of purchase transactions has decreased;

the cost of square meters has decreased(primarily forsecondary housing);

the pace of construction has decreased (new housing still continues to be built, but not on the same scale as before the crisis).

Housing in new buildings is often sold reluctantly. In some residential complexes, commissioned 1-2 years ago, a significant part of the apartments still remains empty. This trend is observed throughout the country - both in the regions and in Moscow.

If we evaluate the forecast for 2017 year, then we can hardly expect a further decline in prices for new buildings. The cost per square meter in houses under construction has already decreased, so this market is likely to simply “pause” until the situation improves. The reverse process is even possible - due to the rise in construction costs, prices may increase slightly.

This is the situation onreal estate market in 2017may lead to a shortage of new buildings in the foreseeable future. If the crisis has already passed its peak, and the state’s economy continues to recover, then the demand for housing will begin to grow again. Due to the fact that now a significant part of the objects is frozen, there may not be enough supply on the market. This situation is unlikely, but still possible (and mainly for large cities).

Reduced prices on the secondary real estate market

On the secondary marketreal estate in 2017(and in the next 1-2 years) a continued decline in prices is predicted. This may partially stimulate demand.

What is the situation in the commercial property segment?

Housing is not the only “good” that is in high demand. The commercial real estate market is also widely developed in Russia. This includes offices, shops, as well as warehouses and buildings - these are the objects that are bought, sold and rented most often.

In the first half of 2017, demand for office real estate begins to recover in large cities. For example: in Moscow in the first quarter, the volume of new purchase and rental transactions was 45% more than during the same period in 2016, and 66% more than in 2015. It turns out that the demand for metropolitan offices increased one and a half times .

The warehouse real estate market is the busiest in the capital. At the beginning of 2017, there was a significant drop in the number of transactions compared to 2016. The average rental rate is in no hurry to rise: at the beginning of 2014 in Moscow it averaged 4,900 rubles per square meter per year. After the start of the crisis, when the warehouse real estate market began to “fall,” it began to gradually decline, and in the second half of 2015 it “broke” the 4,100 mark. Now the average annual rental cost fluctuates at 4,000 rubles per square meter.

Real estate market forecast (video)

Characterizing the current state of the Russian real estate market, it should be noted that it has entered the second stage of its development - the stage of approaching real estate as an object of investment activity. If at the first stage real estate was purchased mainly to satisfy one’s own needs (housing, offices for one’s own needs, etc.) and its profitable resale, then at the second stage real estate is considered as an object of financial investment to obtain a permanent income exceeding the level of bank deposit rates , for example, from renting out real estate.

1) Housing market

The housing sector is one of the most important areas of the economy, providing the necessary human needs. Its condition largely determines the standard of living of the country's citizens and indicates their well-being. Ultimately, the well-being of the people, the degree of their wealth, forms the basis for the development of the country’s economy.

An acute housing shortage is a chronic phenomenon for Russia. At the same time, the transition to market relations led to a reduction in housing construction at the expense of the state budget, which previously was the main source of investment in housing construction. A great need for housing exists at the same time as the average level of income of the modern Russian family is low, which does not allow the majority of the population with low and medium incomes to apply for a purchase.

According to the Institute of Urban Economics Foundation, in 2012, only 39% of Russians were satisfied with their housing conditions. The rest hoped to somehow improve their living conditions.

Housing is available today to about 9% of the country's population, and due to the low standard of living, only 1.2% of the population purchase housing with their own and borrowed money, and only 0.3% of families receive it from the budget.

A special role in the housing market belongs to the state and local governments, which not only perform certain functions as market participants, but also carry out legislative and regulatory regulation of the processes occurring in it. The solution to the housing problems of the Russian population in terms of importance for the state today comes to the fore.

We can highlight a general pattern in developing real estate markets, which we have been observing in Russia for the last 6-7 years: with the highest (and growing) need for space (residential, office, retail, warehouse), fairly high (and growing) effective demand and catastrophically low volume construction and supply of space, prices (rental rates) are steadily growing. But this growth is not uniform - it is wavy in nature. Price growth rates change periodically. The period of price fluctuations in the housing market of various cities ranges from two to three years.

Commercial real estate

In 2011, commercial real estate formats were, as a rule, limited to office and shopping and entertainment centers. The hotel business has a longer payback period and requires higher start-up costs. However, office construction also faces complex procedures for obtaining various permits, a limited number of contractors, and energy shortages. Nowadays it is quite difficult to find a good place for a business center.

Hotels

The capacity of the Russian hotel market in 2007 was estimated at $2 billion. Almost half of this amount falls on Moscow, while it is significantly inferior to other large European cities in terms of the number of hotels. As a result of reconstruction, large Soviet-style hotels should upgrade their category to 4-5 stars and there will be almost no three-star hotels left in city centers. And these hotels belong to the tourist class, without which the development of mass tourism is impossible.

Structure and segmentation of the housing market

The beginning of the development of the modern real estate market can be dated back to the mid-1990s, when, along with the privatization process, the first legal transactions for the sale of apartments appeared.

The experience of the last ten years has shown that the real estate market is developing quite quickly in the capitals of the constituent entities of the Russian Federation, in large transport and cultural centers with a high level of financial flows, effective investments and good development prospects. In them, prices for real estate are set at a fairly high level over time. In small towns with an undeveloped or uncompetitive economy, low financial flows and lack of investment, remote from large centers, and with poor natural or environmental conditions, the real estate market has been in its infancy for a long time, and over time prices stabilize at low levels. Between these extreme types of cities there are many intermediate ones, which are characterized by an average rate of development of the real estate market and an average price level after stabilization.

A characteristic feature that separates these three types of markets is the degree of their dollarization (the use of prices in dollars), which in our time can be considered one of the indicators of the development of the real estate market.

The residential market (apartments and rooms) is today the most developed sector of the real estate market. The market for residential buildings is relatively developed only in the part of cottages and dachas in the suburbs of the largest cities; for multi-apartment buildings it is just beginning to take shape. In various Russian cities, the housing market is developing according to similar patterns, but at different speeds.

By the end of 2013, a record number of uncertainty factors had developed around the Russian real estate market - real estate market analysts came to this conclusion. Indicators of the real estate market, some of them are of a global macroeconomic nature, others are directly related to the field of real estate and construction. But one way or another, the development of any of them can knock the real estate market out of its current equilibrium.

If we talk about the most global macroeconomic factors, it is still not clear where the price of oil will move from the “magic” 100-dollar mark. It is obvious that any development of the conflict in the Middle East can drive the price of oil by $150 or even $200 per barrel. But on the other hand, with the normalization of political tension, according to many experts, oil should become cheaper due to stagnation in the global economy and move to levels of $80-$60 per barrel. It is not clear when and how the next “exacerbation” in the financial markets may occur - whether another European country will come to the brink of default, or America will again exceed its national debt limit, or something else will present another “surprise”. But again, it is obvious that at the moment there are more than enough accumulated fundamental problems in the global economy, which means that periodic “exacerbations” will occur,” analysts noted. - No one yet has a clear understanding of how serious the problems of the economic recession in Russia are or whether in fact everything is moving on as usual, as usual. A lot of uncertainty has accumulated around the real estate market itself. For example, mortgages, as the main engine of solvency of mass demand, do not want to become cheaper, despite all the forecasts, promises and “measures being taken.” Although the point is not even in the mortgage as such, but in the high cost of money in Russia. The past 2013 was rich in discussions regarding the need to reduce the cost of borrowing resources, but so far the situation remains the same. The other side of the coin is the risk of increased inflation when borrowing becomes cheaper, which can have a greater negative effect than cheaper loans. But in the end it turns out that not only the mortgage borrower overpays up to 2-3 times the price of the apartment due to an expensive loan (use a mortgage calculator), but also during construction, loans to developers at 15%-20% per annum over several years of the construction cycle increase the cost of housing by 30%-50%, and sometimes more. At the same time, banks also cannot lend cheaper if they themselves get the resources at a high interest rate, for example, when placing household deposits. It turns out to be a vicious circle that sooner or later someone will have to break.

The issues of bringing unused land into circulation continue to remain in limbo, market analysts stated. It would seem that steps are being taken in this direction, but for the most part it is still difficult for developers to find sites for development at an acceptable cost in order to build housing on them at affordable prices. Much has been said about the need to de-bureaucratize the construction industry and reduce the number of permits and approvals, but so far it has not become easier to build. All these circumstances are confirmed by one simple figure - the volume of housing construction in Russia has hardly grown in recent years and is still very far from the planned figure of 1 square meter per person per year (about 140 million square meters throughout the country).

Another unresolved issue remains the market tax on real estate, the introduction of which seems to be delayed again, experts added. It is clear that in the understanding of most citizens, any new tax is evil. But as world practice shows, it is the market tax on real estate that helps to increase the affordability of housing for the population, preventing the purchase of extra square meters by speculators who do not use it in any way - either for themselves or for renting out, the authors of the study noted. So far, a characteristic feature of our time is this: new buildings in Moscow and a number of other large cities in Russia often have dark windows, a significant part of the apartments were bought for future use and are not used in any way. But buying an apartment in Moscow at an affordable price is problematic, as is renting an apartment in a civilized apartment building - there are no such houses in Russia, with the exception of isolated experimental examples.

It is noteworthy that the dynamics of prices for apartments in Moscow at the end of 2013 essentially reflects the entire “suspended” situation in which the post-crisis real estate market finds itself. And a similar picture takes place almost throughout the country. Dollar prices for real estate in Moscow and the Moscow region decreased by 2.6% in 2013 - from $5,279 per square meter in December 2012 to $5,144 per meter in December 2013. Ruble prices for apartments in Moscow increased over the year by 2.8% from about 163.4 thousand rubles per square meter at the end of 2012 to 168 thousand at the end of 2013. Considering that the dollar exchange rate is now approximately 5%-6% higher than at the end of 2012, these figures are almost identical. Under these conditions, it is most correct to conclude that real estate prices in Moscow and the Moscow region did not actually change in 2013. The real estate market is mosaic, it consists of different objects, some of them, for example, new buildings, tend to rise in price largely due to the stage of readiness, higher quality housing also tends to at least catch up with inflation, the old housing stock does not. But on average, there was no noticeable change in the price level in the real estate market in 2013.

It should always be remembered that even if there is official inflation at the level of 7%-8% per year (according to some experts, real inflation is higher), a price increase of 3%-5% per year is essentially only an increase in nominal terms, they emphasized experts. And taking into account inflation, this is a decrease, so it is hardly correct to say that real estate prices are rising if this growth is less than inflation. Similarly, discounts and promotions on the market of new buildings, as well as trading on the secondary market at the level of 3%-5%, are also standard practice, especially out of season. If the annual dynamics of prices on the real estate market in Moscow or in Russia is less than 5% up or down, then, in fact, this is a lack of dynamics - the market is simply “marking time”, playing out local factors, seasonality, variations in the structure of supply and sales, and other similar factors. It should also be noted that the dynamics of apartment prices in Moscow in 2013 was not monotonous. The increase at the beginning of the year gave way to a correction in late spring - early summer, then by the end of summer and autumn a short upward trend was established again, but by the end of the year a correction came again.

This is where all the above-mentioned uncertainty that now reigns around the real estate market manifests itself, the authors of the study summarized. Events such as the scare from the “promised” devaluation of the ruble in the summer or a series of revocations of licenses from banks in November-December, as well as other similar factors, cause either a surge of activity around real estate, or an equally rapid decline in interest in it. The prevalence of unusual volatility in the real estate market is one of the main features of today, which analysts warned about a year ago in their forecast for 2013.

In this review, we will consider the Russian real estate market, traditionally focusing on the market and advertising aspects. Due to the heterogeneity and specificity of the subject of consideration, the main attention will be paid to the residential real estate market with a focus on the most intensive and developed - the Moscow market.

Story

The Russian real estate market in its development is subject to the general laws of economics, although the specifics of our country, naturally, leave their mark on it. The general vector of the market is in the direction from spontaneous to balanced and civilized. According to most experts, the following key stages can be distinguished.

The emergence of the real estate market in Russia can be attributed to the late Soviet era, when in mid-1990 the concept of private property appeared in the Law “On Property in the USSR”. The real development of the market began with the start of privatization in 1992.

The stage of formation of the Russian residential real estate market was specific and had a number of features. The most significant distinctive features include prices that are lowered several times due to valuation based on book value, a multiple excess of demand over supply, and underdeveloped real estate services.

The driver of market development was the Moscow region. At the end of this period, there was a sharp jump in prices for almost all housing market objects (almost 8 times).

The next stage of development of the real estate market can be called a transitional stage. It started in the second half of 1993. Characteristic features of this period were fairly high prices, although they did not yet reach world prices, the emergence of market relations between market participants, as well as a slowdown in the rate of housing privatization, which had passed its peak.

Supply and demand began to align. A regulatory legislative framework emerged, and the role of the state in the market gradually began to increase. The concept of luxury real estate was born - exclusive, unusual for mass development projects, aimed at people with money. At the same time, real estate advertising also developed, and standards and approaches for typical advertising campaigns for residential properties were developed.

The 1998 crisis and the post-crisis (recovery) period until 2000 should be highlighted separately, since the events of 1998 somewhat stopped the ongoing forward movement towards the formation of civilized market relations. All markets, including real estate, were in a stage of temporary freeze and struggle for survival. At the same time, the real estate market has demonstrated much greater inertia compared to other sectors of the economy.

Market professional development stage – this is 2000–2002. The country has fully recovered from the crisis, the level of income of the population has stabilized and began to grow. The formation of a middle class was underway, which had not yet become the main dictator of interests in the formation of consumer preferences, but the market had already responded to it, singling it out as an independent target group. This stage is associated with the rapid development of the real estate market and its rise to a qualitatively new level. This is the beginning of the formation of civilized relations between the seller and the buyer, and the development (albeit slow but sure) of the legislative framework, and a high level of competition, and an abundance of offers for different tastes and income levels - from mass panel construction to individual projects, as well as the introduction of new technologies and solutions.

At the end of this period, one of the key motives of consumer behavior is clearly formed (primarily in Moscow and St. Petersburg) - considering the purchase of real estate as one of the most profitable ways to invest one's own funds. The preferences of buyers in this segment are determined by the desire to invest money profitably and not go broke, rather than by real tastes and wishes for the quality characteristics of the house and its location, which is the priority of the segment of real estate buyers to solve the housing problem. Reliability and the name of the developer come first for both segments. As for sellers themselves, in search of a competitive advantage they are paying more and more attention to professional market attributes: marketing, advertising, PR, including the image component.

Mature, advanced market stage began in 2003 and continues to this day. The key words of this period are “respect for the buyer” and “customer focus.” The information openness of the market is increasing, real estate companies occupy a significant place, and the majority of participants in transactions resort to their services. At the same time, more attention is paid to the reputation of real estate agencies, and the role of private brokers and realtors is gradually decreasing.

Consumer psychology has changed radically. At this stage, for the first time, a change in priorities is clearly visible: it is no longer the seller who dictates the rules of the game to the buyer, but the buyer, having become more educated and discerning in matters of the market and market relations, places higher demands on the offered product (its quality characteristics). A conscious, rational, thoughtful decision has come, which is based on a clear understanding of one’s own preferences and ideas about the desired housing and its purpose. The supply market is also changing its structure somewhat, focusing on the consumer. Due to the increase in the layer of people who consider themselves to be middle class, the market is responding to this trend with a growing number of business class projects.

The further formation of market relations in the real estate sector and the increasing involvement of the Russian economy in global processes ultimately led to market openness. Despite all the features, the development of the domestic real estate market is largely influenced by global trends. The most important of them include prices for energy resources, primarily oil, world currency rates, etc. That is why the global financial and economic crisis of 2008-2009 had a huge impact on the Russian real estate market, which, like the 1998 crisis, went through a period of a year-long “freezing” and gradual “thawing”. By 2010-2011, the market had fully recovered and continued to develop progressively until the end of 2014.

A stable and reliable real estate market with a favorable investment climate provides an average increase of 5-10% per year. Such indicators are typical for Western European countries and are still the main guideline in determining the reliability and civility of the real estate market.

Market structure

The following segments of the real estate market are distinguished by types of transactions:

• purchase and sale of real estate;
• Rental Property;
• mortgage, etc.

By type of ownership Real estate market objects can be classified into private, state and municipal.

By functional purpose The market can be divided into:

• residential real estate;
• industrial building;
• non-industrial buildings and premises (warehouses, offices, etc.).

The real estate market is also usually divided into primary and secondary:

• The primary real estate market means a set of transactions made with newly created objects. This market, as it were, “launches” real estate into economic circulation;
• The secondary real estate market refers to transactions made with objects that are in operation, as well as transactions related to resale or other forms of transfer of objects from one owner to another.

The real estate market in the Russian Federation is one of the largest segments of the national economy. At the same time, its development largely depends on the state of affairs in other key sectors of the economy. The Russian real estate market is sensitive to crises and the macroeconomic situation. How is this dependence traced at different stages of its development? What are the main periods of formation and growth of the Russian real estate market?

Russian real estate market: structure

Considering the main stages of development and formation of the Russian real estate market, it will be useful to study it from the point of view of the functioning of 2 quite different segments - transactions with residential properties and legal relations, the subject of which is the purchase and sale and lease of commercial property.

It can be noted that both of these areas perform a number of important functions for the national economy of the Russian Federation:

Stimulating demand in the lending market;

Stimulating supply in the construction market;

Stimulating the growth of the money supply in a large number of other business segments - the field of real estate consulting, the production of building materials, varnishes, paints, finishing, wallpaper;

Solving current social problems related to providing citizens with housing;

Thus, the real estate market is one of the most important drivers of economic growth for the country as a whole. Let us now consider how its most important segments were formed and developed.

Russian residential real estate market: the first years of development

In what year was the Russian real estate market formed in the field of transactions with residential properties? There are several points of view on this matter.

According to many researchers, the residential real estate market in the corresponding segment began to take shape in 1990, following the publication of the Law “On Property,” which approved the institution of private property in the USSR for the first time in a long time. Before this, in the Soviet Union, this or that property, including apartments, was in the personal possession of citizens. But not in private ownership - the corresponding institution in the USSR was associated mainly with the capitalist system, which was ideologically opposed by socialist principles.

As soon as the Law “On Property” was adopted, citizens of the USSR had at their disposal houses and apartments, which by that time they had acquired in accordance with the existing lending formats. It must be said that these loans were quite far from the mortgage programs familiar to today's average person, but to some extent similar to them. Owners were also able to sell their properties on the market.

Privatization factor

In turn, in 1992, large-scale privatization of apartments received by that time from the state began. This predetermined the formation of large volumes of supply in the market, and due to the fact that free housing from the state was reduced to a minimum (except within the framework of certain social programs), demand for real estate also appeared.

If we talk about when the Russian real estate market arose, then we can focus on the period when the privatization of state apartments began. That is, this is 1992. However, some experts believe that the Russian real estate market was formed in 1991, just after the Law “On Property” was fully operational, and the first commercial transactions for the purchase and sale of housing began to be carried out. But due to the rather small volume of supply and demand, those mechanisms that characterized the market before could not be considered as fully market ones. Only with the beginning of privatization did they begin to form.

Thus, the stages of development of the Russian real estate market, if we talk about the residential segment, are more appropriate to count from 1992. Another thing is that the corresponding sphere of commercial relations presupposed the presence of not only the institution of private property, but also a large number of legal and financial mechanisms through which transactions for the purchase and sale of apartments could be carried out. Let's consider this aspect in more detail.

When were the legal mechanisms of the Russian real estate market formed?

So, in what year the Russian real estate market was formed, if we talk about its residential segment, we now know - in 1992. However, in its original form it functioned within the framework of outdated legal mechanisms, largely oriented to the socialist period. Needless to say, the state did not even have a Constitution at that time. But in 1993 it appeared. Later, laws on state registration of rights to real estate were adopted and put into effect - in 1997, on mortgages - in 1998.

Legal and financial institutions: influence on market development

Thus, despite the fact that the Russian real estate market was formed in 1992, it took time to acquire appropriate mechanisms for legitimizing purchase and sale transactions, as well as lending.

Actually, the fact that mortgage programs were approved at the legislative level predetermined the beginning of the formation of a new stage in the development of the housing market in the Russian Federation, characterized by a steady increase in demand, and as a consequence, real estate prices. Regarding periodization, it corresponds to the 2000s before the start of the crisis of 2008-2009.

Let's consider its specifics in more detail.

Residential real estate market of the Russian Federation: from the early 2000s to the crisis of 2008-2009

The main factors in the development of the Russian real estate market in the corresponding period were, therefore, mortgage programs (demand for them became especially intense in the mid-2000s), growing salaries of citizens, as well as constantly high demand for housing. As a result, apartment prices rose rapidly in the 2000s. A factor in their reduction could be the crisis in the economy, which would predetermine a slowdown in the mortgage market, as well as a decrease in demand for housing due to a decrease in wage growth.

Similar conditions arose in the fall of 2008, when, against the background of negative financial indicators of the world market, problems arose in the Russian economy. The incomes of citizens of the Russian Federation in the period until about 2010 stopped growing, at least at the rate that was observed before the crisis in the fall of 2008. Banks began to evaluate the solvency of mortgage borrowers more strictly, and therefore the pace of housing lending decreased.

Russian residential real estate market: prospects

The stages of development of the Russian real estate market that we have considered indicate that crisis phenomena are nothing new for the corresponding segment. During the recession of 2008-2009, there was a similar decline in housing prices as during the 2014 crisis, and the dynamics of mortgage lending decreased. But as soon as the situation in the economy improved, the situation in the residential real estate segment also improved, due to the constantly high level of demand for housing.

Waiting for government action

High oil prices, starting in 2011, amounting to about $100 per barrel, helped the Russian economy overcome the 2008-2009 crisis. Whether there will be a return to them now, when “black gold” is several times cheaper, is a big question. If this is the case, then the once relevant driver of growth in the Russian economy will probably work. If not, you will probably have to wait until the programs adopted by the Russian government to stabilize the situation in the national economy, aimed at ensuring the replacement of oil revenues, begin to function.

Consequently, the state of affairs in the residential real estate market depends on how successful government policy will be in adapting the Russian economy to the new conditions that have developed in the global market.

Commercial real estate market in the Russian Federation: formation and development

So, we found out in what year the Russian real estate market was formed and how it developed - in the residential segment. Let us now examine the specifics of another area, namely, commercial real estate. Purchase, sale and rental transactions here are carried out in relation to such objects as office buildings, shopping centers, hotels, warehouses, garages, industrial facilities, stadiums.

Has privatization made a difference in business?

At the beginning of the article, we determined that in the residential segment the Russian real estate market was formed in 1992, when privatization began. As for commercial properties, such market phenomena in the relevant area, when property was transferred free of charge from the state to private owners, were not observed on a large scale. Therefore, the privatization of private commercial properties, although it took place in the Russian Federation, could not become the same powerful driver of segment growth as in the case of residential real estate.

Therefore, we can conclude that in the commercial segment, the Russian real estate market was formed in the year 1991, after the Law “On Private Property” came into effect. Further drivers of its growth were, again, the development of lending programs, but already adapted to the commercial sphere, as well as the intensive development of the Russian economy, especially in the early 2000s.

The economic factor is universal for all segments

As in the case of the residential segment, the commercial real estate market turned out to be sensitive to the crisis of 2008-2009. It was also negatively affected by the recession of 2014 and 2015. Therefore, the prospects for further development of this area of ​​the national economy also depend on macroeconomic trends.

However, unlike citizens, who are the main sellers and buyers in the residential real estate market, the corresponding entities in the commercial segment - enterprises - can have a more significant impact on economic processes in the country. Thus, the implementation of government programs aimed at modernizing the economy largely depends on the intensity of commercial activity of private enterprises.

Therefore, business can do a lot to ensure that the situation in the national economy of the Russian Federation acquires more positive dynamics. As a result, to stimulate further development of the commercial real estate market.

Summary

So, we have determined in what year the Russian real estate market in the residential and commercial segments was formed and identified the main stages of its development. The main factors influencing the state of affairs in the relevant sphere of the national economy are mainly macroeconomic in nature. If the situation in the country’s economy is characterized by a predominance of positive trends, the real estate market in both segments is actively developing.

As for the peculiarities of its development in the residential and commercial sphere, we can first of all note the fact that the Russian real estate market was formed under the special conditions of the transition from a socialist model of the economy to a capitalist one. The legal and financial institutions necessary for its full functioning did not appear immediately.

However, modern Russian real estate is developing according to the same principles that are characteristic of most capitalist states. Prices are formed on it due to the objective relationship between supply and demand. This explains the dependence of its development on the situation of the economy as a whole. If there is effective demand, then market dynamics will be positive.