With new build: developers allow apartment sales to decline in 2025
The developers gave Izvestia such forecasts for 2025 as a decrease in apartment sales by up to 15%, a decrease in the launch of new projects on the market, as well as instability of demand. The construction industry allows mergers and acquisitions of companies, stabilization and even growth of prices both on the primary and secondary housing market after a slight, but still falling. At the same time, experts are more critical of the situation, assuming unpredictability of the market in case of a new increase in the key rate by the Central Bank.
What will happen to the real estate market
The fall and winter of 2024 became one of the most difficult periods for the construction industry. After the abolition of preferential mortgage programs, shortage of limits, prices in the primary housing market began to decline. The reason is that it was the mortgage that ensured the availability of square meters for the majority of Russians and fueled pricing. However, purchasing power sharply decreased after the cancellation of a number of mortgage programs, and demand for new buildings began to fall. Therefore, prices have crept downward.
Plus, the Central Bank raised the key rate to 21%, and developers' loans, a significant part of which were built in debt, became very expensive. Against this background, the Ministry of Construction began to prepare a plan of measures to support the industry, including a moratorium on bankruptcy and compensation for loan costs. Despite the fact that the Bank of Russia did not raise the interest rate in December, the mood of developers interviewed by Izvestia is not the most optimistic.
- According to our forecasts, in 2025 the sales volume will decrease by 15%. At the same time, demand in the market will remain active due to government subsidy programs, primarily - family mortgage, which recently allocated additional budget funds, as well as the Far East and Arctic mortgages, - told "Izvestia" head of analytics of the group "Samolet" Olesya Dzyuba.
According to her, the largest sales volumes will come to large industrial centers of Russia. In order to maintain the balance, developers will bring less new volumes to the market, but it will not lead to the inevitable price increase by 5-6%, but to the increase in the cost of construction and the growth of financial expenses among developers, believes the representative of the industry.
Dmitry Golev, Commercial Director of Optima Development, believes that in early 2025 the outflow of clients from the primary market will intensify.
- At the same time, there is a high probability that the key rate has already reached a plateau. This is evidenced by the persistence of the rate in December. Perhaps, under pressure from the executive branch, the Central Bank will switch to other inflation targeting tools. As a result, the process of reduction of the key rate and recovery of purchasing activity may begin in the coming months, - believes the developer.
According to him, the country's leading real estate developers have an impressive margin of safety to avoid bankruptcy in 2025. But M&A (mergers and acquisitions) deals are not excluded. With their help, the industry giants will diversify their operations and replenish their land bank, says a business representative.
- Mergers will take place, but not in connection with the record value of the key rate. We have been observing a corresponding process for two years now. Major players are striving for collaborations, as now the priority in the development sphere is the projects of complex development of territories, which are easier to realize by joint efforts due to their significant scale, - said, in her turn, the General Director of Key Capital Olga Guseva.
According to her, it is possible that in the beginning of 2025 the market will face a certain "pit" of consumer activity, but this situation will not be long-term.
Vladimir Shchekin, the co-founder and co-owner of Rodina Group, is more optimistic in his assessments.
- In 2025 we do not expect a sharp decline in the volume of commissioning of new projects. This is due to the duration of the development cycle: it takes about three years from the beginning of work on a complex to the moment of buying an apartment. Projects that are at a high stage of readiness will enter the market," he explained to Izvestia.
In his opinion, developers will stimulate demand for housing by applying a variety of tools. Among them are various installment programs. At the same time for sustainable growth of demand it is necessary that the macroeconomic situation was favorable, the developer stressed.
He also sees no grounds for price reduction. Probably, the cost per square meter in the primary market will remain at the same level or slightly increase, he suggested, noting that with the instability of the economy possible mergers, acquisitions, bankruptcies of construction companies.
The Ministry of Construction did not respond to Izvestia's inquiry at the time of publication. But earlier the ministry reported stagnation in the industry. Thus, Deputy Head of the Ministry of Construction Nikita Stasishin stated that by the end of 2024, 16% less housing will be commissioned, and the "quiet" period in sales may last until March 2025.
According to the Dom.RF forecast available to Izvestia, mortgage issuance and new project launches will decline in 2025 amid weak demand and high interest rates.
"Mortgage issuance will drop to 1-1.2 million loans worth 3.8-4 trillion rubles. Recovery will begin in 2026, provided the key rate is lowered," the document says.
At the same time, according to Dom.RF, the accumulated sales backlog will allow developers to guarantee the completion of projects with commissioning in 2025, but weak demand will lead to a decrease in launches - as a consequence, the risks of falling housing commissioning from 2027 will increase.
How the real estate market will develop in 2025
At the same time, representatives of the non-construction business in real estate assess the development of the situation more critically. In their opinion, there is no absolute certainty that the Central Bank will no longer raise the rate, which negatively affects the cost of loans and mortgages.
- It all depends on what exactly the government decides to fight - inflation or stagnation. In the first case, the rise in prices will be minimal, construction activity will continue to slow down, and the revival of mortgages will be postponed indefinitely. In the second case, we are expecting a noticeable rise in the price of apartments, the revival of the market of borrowed funds and the growing gap between the price level and incomes of the population, - believes Olga Khasanova, General Director of URBAN real estate projects.
According to her, in general, the characteristic feature of the observed crisis is complete unpredictability. At the same time, the business representative notes that prices in the primary and secondary markets have begun to equalize. This was influenced by the slowdown in prices for new buildings and the reduction of offers in the secondary market, the expert believes.
In 2025 the situation in the construction industry will certainly not be simple, agrees Dmitry Khalin, General Director and Managing Partner of "Intermark City Real Estate".
- The economics of projects is quite complicated now. Everything is becoming more expensive: building materials, engineering systems, finishing materials, labor remuneration is increasing, etc., and all this is happening in conditions of very high interest rates on loans. In such conditions it is necessary to make Herculean efforts not only to pay off the project, but also to get profit, and without profit no sensible investor and developer will not realize the project, - he explained to "Izvestia".
At the same time, the expert believes that even if stabilization comes, Russians will not see large volumes of construction and large-scale projects entering the market at once, as it used to be. According to him, in the primary market the impetus for price growth may be the improvement of conditions for the purchase of real estate in installments, but in the secondary market such an impetus is not yet visible.
The founder of BEST-Novostroy and bnMAP.pro Irina Dobrohotova believes that the entire 2025 construction industry is likely to live in difficult conditions of the end of 2024, until the Central Bank will not reduce the key rate. At the same time, according to her, the situation will be different in Moscow and in cities where expensive housing is represented. The more expensive the segment, the less it depends on mortgages, the higher the share of sales with 100% payment and the smaller the drop in demand, the expert emphasized.
- The situation with prices will also differ depending on the segment. Already now in the mass segment we observe a certain stagnation: somewhere since August prices either stand still or show a small decrease. At the same time, we still see growth in expensive segments. And in Moscow as a whole, due to the special structure of supply, we also see a slight growth over the year," she explained.
The real estate market conditions in 2025 will depend on the Central Bank's policy, the level of the key rate and government measures to support demand, says Ruslan Syrtsov, Managing Director of Metrium.
- At the moment, it is safe to assume that the key rate and, accordingly, mortgage loans in 2025 will remain unaffordable for many potential buyers. Further market dynamics will be determined by a combination of factors, including the overall macroeconomic situation, inflation rate and household incomes," explained the business representative.
According to him, the growth of prices in the primary market is stimulated, first of all, by significant inflation on construction materials, equipment and services, labor shortage, the rise in the cost of project financing and bridge loans, land plots and the procedure for changing the type of permitted use of land. However, the impact of these factors is seriously offset by the high key rate, inaccessible market loans, and the abolition of preferential mortgages, which leads to customer outflow, especially in the market of new buildings of comfort and business class.
- Studies show that customers are psychologically uncomfortable to sign a mortgage above 16% per annum. Reduction of the key rate next year is possible, but still not to comfortable values, - said the representative of the business.
The head of "Cian.Analytica" Alexey Popov, in turn, said that the main risk for the industry in 2025 is the growing cost of borrowing, increased credit burden on developers and real estate owners.
- The results of July-November 2024 confirm that it is difficult but possible to find buyers even at a market rate of 25% or higher and with severely reduced incentive programs, while the financial models of many companies were not designed for such external inputs. The demand will have to be supported by new managerial inputs - the expansion of family mortgages to the secondary market and the "unlimited" nature of the allocation of funds for it over the next year, - he explained to "Izvestia".
According to him, a positive factor for the market remains the continuing growth of the economy and real incomes of the population, high confidence in real estate as a tool for saving, strong construction lobby, high transparency of the industry. According to the expert, this will allow the state to react promptly in case of an increase in the probability of crisis manifestations.
