Real estate trends in 2024

With the arrival of 2024, Russia is witnessing a notable shift in real estate trends, which is shaping a new market picture. These changes affect buyer preferences, the formation of the urban environment and the overall dynamics of the construction industry.What changes will cause prices and sanctions in the Central Bank’s policy, what will happen to mortg ages, whether the preferential lending terms will remain, and what kind of real estate will be profitable to buy in Chelyabinsk – we will consider further.

General forecast for the real estate market in 2024

Now there is support for demand and price stability, thanks to the preservation by banks for 3-4 months of the same conditions for previously approved loans (the exact duration of approval and conditions depend on the specific bank). Also, the temporary “stability” of the market is supported by federal urban environment programs that provide subsidies to developers.

However, the market activity is forecasted to slow down, especially in the secondary housing segment. In the long term, this may lead to price changes due to the delayed effect of the key rate changes that took place in August 2023. Thus, a noticeable freezing of demand and change in price dynamics is expected in February – early March, which will affect the final cost of objects.

Forecasts for the real estate market point to an upcoming price decline. This is due to the formation of a “bubble” in the market in recent years, where, despite the overall growth, different segments of real estate show unequal resistance to changes. Quality properties may only get slightly cheaper, while properties in old houses with illiquid characteristics will lose value significantly.

Given the trends of 2024, we can expect a slowdown in demand and price changes in the real estate market in Chelyabinsk and Russia as a whole. This is especially true for secondary housing, the cost of which is negatively affected by high mortgage rates and stagnant market conditions. While sellers are trying to realize their residential objects at inflated prices, but to keep them at a high level for a long time will not work. Therefore, the secondary market will start to “subside” in the first months of this year.

There are forecasts for price growth. This mainly concerns private construction, as construction materials become more expensive due to inflation and unstable exchange rates. The increase in the cost of houses in this case will be about 10%.

What changes will occur in mortgage lending

The increase in the key rate of the Central Bank has led to an increase in rates, bringing them closer to 20%. Under the basic program in Sberbank, the rate for mortgages in 2024 fluctuates around 18-19% per annum. The preferential program, despite this, remains the main driver of mortgage market development and support for developers. However, the Central Bank is of the opinion that it is the affordability of mortgages for the majority of the population that leads to the growth of the mortgage bubble and uncontrolled growth of housing prices.

Sberbank’s interest rate under the basic program

The Ministry of Finance also raised concerns about the duration of the preferential programs, saying that they should be completed as planned: by July 1, 2024. The program conditions were changed at the end of 2023, increasing the down payment from 20% to 30% and limiting the maximum loan amount to 6 million rubles for all regions of the country. In this regard, in order to purchase a new apartment in the Chelyabinsk housing estate under construction on favorable terms, you must first save at least 2 million rubles for a down payment.

You can buy an apartment in Chelyabinsk on favorable terms from the developer Vesna

Forecasts from experts point to the gradual winding down of preferential mortgages and the expected decline in the volume of its issuance. The new requirements put in place may lead to a 2-fold decrease in approvals of concessional real estate loans. It is likely that in the future the benefits will be available to targeted groups, such as large families, military, valuable professionals. This will strongly influence the demand for commercial and residential real estate in the second half of 2024.

However, while the program is valid until July 1, 2024, the possibility of its extension with adjustments cannot be ruled out. This scenario remains the most likely, given the construction industry’s dependence on it, as well as support from banks, developers, deputies and agencies. At the Rossiya exhibition, last November, it was indirectly stated that the preferential mortgage programs may be maintained beyond the announced date. In this case, a decline in demand is unlikely to be expected.