Should you buy real estate in 2021

2024 Author: James Gerald | [email protected]. Last modified: 2023-12-17 14:00

Experts give different predictions about whether to buy real estate in 2021.

Likely scenarios in the real estate market

Some experts predict a total drop in prices, which will allow many citizens to purchase square meters, as well as a decrease in the cost of collateral when issuing loans. Tables with minus percentages on the cost of housing in Russian cities are given.

P. Lutsenko, director of the "World of Apartments", predicts a 10-percent decline in the cost of secondary housing after quarantine. However, the secondary housing and elite housing, in his opinion, are not the main objects on the market now.

Any advice on how to keep your savings always includes investments in gold, gems and real estate. Experts do not give an unambiguous answer to the question of whether it is necessary to buy housing, do not predict significant changes in this market segment, although they emphasize that price fluctuations will undoubtedly be observed:

1. The age-old pessimists warn against acquisitions. They are sure that soon an era of a total fall in prices per square meter will surely come. Therefore, it is better to refrain from investing funds for now. The main argument is the financial crisis due to the global pandemic.
2. Optimists are confident that due to the position of the Central Bank on the key rate, the measures taken by the government, the rise in prices is inevitable. According to experts, not only the record low interest rates on mortgages, but also the resulting shortage of proposals in the field of residential construction will contribute to the increased pricing.
3. Realists are also confident that housing in Russia will rise in price due to the use of imported building materials, as there is a shortage caused by the closure of borders between countries. And also due to unprofitable interest rates on deposits and underproduction of new housing, as evidenced by statistics.

Let's try to find an answer to the question of what will happen to real estate prices in the near future.

Will the cost of housing rise

Even the financial crisis is not a reason to believe the pessimists. High bank interest rates and the lack of money among the population two years ago led to a disproportion between construction and demand. Developers were not always able to realize square meters, so the state took measures to regulate the problem legislatively.

To this end, they did the following:

• introduced project financing and eliminated the possibility of creating fraudulent pyramids;
• allowed the targeted use of matkapital to pay the first installment for a mortgage (young families more than other categories of the population need housing or improve existing conditions);
• increased the amount of maternity capital for the second child and introduced payments for the first, as well as indexed the already established amounts;
• introduced the possibility of paying off mortgage arrears from funds for a third child.

The most important of these factors are the introduction of project finance and stress testing. Some developers did not find readiness for additional project costs and retired from their activities.

Those who counted on a bank loan had to prove the profitability of the construction, otherwise the bank would not allocate appropriations for it.

The result was not only the sale of previously standing illiquid assets (figuratively called a "soap bubble" due to the permanent increase in unrealized volume). On the very eve of the coronavirus, analysts noted the underproduction of facilities, which means that the demand for acquisition in the country has already exceeded the available supply, and this gap is widening.

Influence of other factors

Real estate agents are sure that there can be no talk of price reductions: an increase in the cost per square meter is inevitable by the end of the new year. Therefore, the answer to the question of whether to buy real estate in 2021 is not in this context, but in determining the optimal timing. Until the second half of the year, it is profitable, and by the end of the period there are already risks:

• The central bank may raise the key rate; banks will raise mortgage interest rates;
• market instability (falling demand or the appearance of a sufficient number of objects) will inevitably cause unrest, which may result in a rise in prices;
• The pandemic has clearly demonstrated the insecurity of investments in stocks, bonds and securities, therefore, investments in gold, precious stones and residential properties are growing.

Interesting! STS for individual entrepreneurs in 2021

Low key rate is a financial instrument for settlement not only in the banking sector. The state uses it to curb inflation, and this is effective, but at the same time devalues the national currency.

When raising, risks are inevitable for those who keep their savings in dollars or euros. They will have to come to terms with the inevitable loss of investments or put money on a deposit in a bank, where an unfavorable interest is offered. Therefore, there is a search for a more reliable investment method, and housing is just one of those.

Expert forecasts

When asked what will happen to real estate prices in 2021 in Russia, experts in the field of construction and implementation of objects express different opinions:

1. M. Litinetskaya, a leading expert on the real estate market, is sure that at the beginning of the year we can expect an increase in demand from those who postponed the purchase due to unforeseen circumstances (an additional argument - reduced mortgage rates);
2. A. Gusev, general director of a construction company, is confident that active demand will be short-lived;
3. Representative of the Guild of Moscow Realtors R. Vikhlyantsev announced a forecast of a fall in demand for properties that are unprofitable or impossible to buy with a mortgage (for example, secondary or luxury housing), which should be expected in the summer.

There is another weighty argument: the current proposals, tested for stress resistance, are not limited in time. The estimated losses inherent in the projects were spent on loans, taxes, and partial payments to employees. Therefore, a decrease in prices should not be expected.

Outcomes

1. So far, the situation on the real estate market is ambiguous, as are the opinions of experts on this matter. There are gloomy, optimistic and realistic forecasts that take into account all the peculiarities of the housing market.
2. The state took measures to eliminate the negative situation in the field of new construction, and instead of overproduction, there was a certain shortage of facilities.
3. The fall may affect elite mansions and high-rise buildings, secondary housing objects.
4. Favorable mortgage interest is a strong argument in favor of buying in the first half of 2021.