In Moscow, since the beginning of 2019, they sold a record amount of housing, but there is one format, the demand for which, on the contrary, has seriously dropped – these are apartments. The riddle of the situation is reinforced by the fact that this type of real estate is cheaper than ordinary apartments by 20-25 percent – a significant difference provided the apartments with a steady demand of budget buyers. What is the reason for such a sharp loss of confidence in the most affordable type of housing – Lenta.ru figured out.
According to Est-a-Tet analysts, over the past 12 months, the volume of apartments sold in the capital has decreased by 36 percent. A trend confirmed by other market participants: the same data provided “Lente.ru” analysts cyan and real estate agency “Bon Ton”.
“The tendency to decrease in sales of apartments has manifested itself since February 2019, when the decline in demand was nine percent,” according to the materials of the analytical department of Bon Ton (available to the editors). “Further, the gap only grew, and at the same time, the share of apartments in sales decreased from 11.4 percent at the beginning of the year to 7.5 in July.”
But the mere reduction in supply does not explain the decline in apartment deals: according to Bon Ton statistics, the washout ratio for apartments, which shows the share of sales in terms of supply for the month, has been decreasing since the first quarter of 2018. This is especially noticeable in the democratic comfort class: during this period, the figure dropped from 15.4 to 4.3 percent.
It was comfort-class apartments that were traditionally in demand among thrifty buyers purchasing first-class housing: according to Natalia Shatalina , Director General of Miel-Novostroyki , apartments of comparable area cost on average 5-25 percent cheaper than apartments. Moreover, as Roman Rodiontsev , director of the Est-a-Tet project consulting department, specifies that in residential complexes where the developer “mixed” both real estate formats, the difference in price is usually the maximum – 20-25 percent. At the same time, buyers of apartments, of course, are not limited in their use of the entire infrastructure of the complex.
There are nuances
What makes people with a strictly limited budget for the purchase of real estate turn away from the apartment? The lack of a “registration” is traditionally considered a minus of the format: you can only register in the apartment temporarily – the procedure will have to be repeated every five years. However, Maria Litinetskaya , managing partner of the Metrium company, is sure that this has never frightened the target audience of the format.
“In Moscow, up to 80 percent of the apartment’s client audience are Muscovites who already have a“ residence permit ”. And for the others, its presence does not give significant advantages, except for the right to vote in elections, ”the expert believes.
Another disadvantage is increased (relatively “classic” housing) expenses for owners. This applies to both “communal” and property tax of individuals. “Taking into account the reduction in real disposable incomes of the population, one can expect that when choosing between an apartment and an apartment, buyers begin to look not only at the sale price, but also at future expenses for their maintenance,” says the head of analytics and consulting department “NDV-Supermarket of Real Estate” Sergey Kovrov. “Apartment owners are at a disadvantage compared to apartment owners, overpaying several times more for just one property tax.”
According to Maria Litinetskaya, owners of non-residential meters, on average, spend 12 percent more on water supply than apartment owners. Water disposal and sewerage are more expensive for them by eight percent, heating – by 25 percent already, and electricity supply – by 36 percent. On the other hand, as Bon Ton analysts remind, there is no “overhaul” line in the bills of apartment owners. Another small bonus for apartment owners is the softer requirements for redevelopment (which, however, may also affect the frequency of communal accidents).
As for taxes – as non-residential real estate, apartments are subject to property tax at a rate of 0.5 to 2 percent of the cadastral value of the object. The specific figure depends on the specific status of the property – say, hotel rooms are taxed at a rate of 0.5 percent, and retail and office space – already at two percent. The rate for apartments with a market value of up to 10 million rubles – 0.1 percent of the cadastral value, from 10 to 20 million – 0.15 percent. But the cadastral cost of the apartments itself is usually lower than that of apartments in the same area – according to Metrium, the difference is 1.5 times.
However, according to Koldi’s commercial director, Elena Oreshkina , a special “preferential list” operates in the capital, where apartment complex developers seek to include their facilities. Entering into the list provides “non-residential” commercial and office purpose of reducing the rate to 0.5 percent.
Another point: apartment developers do not have to comply with certain requirements that are mandatory for housing – talking about insolation (room illumination standards) and LCD infrastructure. “Apartments and apartments do not differ from each other in terms of planning solutions and ceiling heights, the difference is in providing schools, kindergartens, parking lots, etc.,” explains Pavel Inshakov, director of the direct sales department of Federation Tower. “For developers, the construction of apartment complexes is very interesting: this is an opportunity to build more square meters on the land plot with less infrastructure costs.”
“The right not to provide infrastructure and to comply with less stringent insolation norms for non-residential premises apartment developers use very often – otherwise they would have implemented such a project as apartments,” agrees Alexey Popov , head of the analytical center of the Center for Nuclear Research , adding that “In apartment complexes of the middle segment is usually smaller than that of apartments (whereas in the premium segment the difference is, indeed, almost imperceptible).
Natalia Shatalina confirms the trend: according to her, the area of comfort-class apartments is on average 19 percent lower than apartments of the same price segment. However, for many budget buyers, this is rather a plus: less meters – the final cost of the object is less.
Yes, and all of these disadvantages, strictly speaking, have long been no secret for apartment buyers. The format has been on the market for several years, and with all its shortcomings it has remained in demand – due to the price difference with apartments and high investment attractiveness (apartments are a good rental business, this is commercial real estate, which means that the owner can safely open the “houses” at least at least a hotel, even an office).
But the low budget and attractiveness for private investors no longer hold up the demand for “non-residential”.
“The chances of apartments are reduced to the next round of economic growth,” says the head of the research company MAR Consult Dmitry Shimanov . – The target audience of the format – successful self-employed, startups and other small and medium businesses – is experiencing the most difficult times. In the conditions of stagnation, it is possible to increase revenues mainly for large business, which does not have a direct benefit from the purchase of apartments. ”
Not for all
Not in favor of the apartments and the reduction in prices for apartments near developers has played – yes, it became possible mainly due to the reduction of space, but it suits the economical buyer.
“Developers of residential complexes with apartments in 2018-2019 brought to the market large volumes of supply at an attractive cost, trying to be in time before the introduction of project financing. It was not easy for the apartments to compete with such a proposal, ”explains Ekaterina Nikolaeva, head of analytics department at Mosrealstroy, explaining the decline in demand .
Recall that the potential buyers of money is getting smaller. When buying apartments, the mortgage becomes a solution; apartments with this are more difficult. Firstly, not all banks lend to “non-residential”, secondly, the rate on loans for apartments is higher (on average, by 0.5–1 percent, as estimated by the Head of Client Relations Department of SDM Bank, Ivan Lonkin) the amount of the required down payment. On the mortgage programs with state support apartment buyers have to forget in principle.
And finally, the urgent issue of guarantees. Apartment developers are not obliged to sell them under equity agreements (DDU), which means that changes to the 214 law, introduced from July 1, 2019, will not protect the buyers of such real estate. Moreover, even if the complex is sold at the DDU, in the event of bankruptcy, apartment buyers will not be able to count on registering defrauded real estate investors — after all, they bought non-residential real estate.
By the way, according to Metrium statistics, at least 86 percent of projects under construction with apartments are sold precisely at the DDU, and according to statistics from the Azbuka Zhilya company, this share can reach 95 percent. “The city government is actively encouraging developers to sell apartments in accordance with the Federal Law 214,” explains Vladimir Kashirtsev, director general of Azbuka Zhilya. “This is important to the developers themselves: the scheme allows us to attract banks to issue mortgages.”
At the same time, since July 1, the economy of apartment projects has further deteriorated, the expert reminds.
“The apartments still have an additional specific burden on the economic results: the cost of sales is lower, plus VAT is included in the price of the apartments, which does not appear in the sale of apartments,” Kashirtsev stresses.
It is not surprising that, according to Moskomstroyinvest, there was no wave of people who wanted to switch from apartments to apartments with the transition to the new rules of work on DDU among players in the market.
It seems that not only developers, but apartment buyers, to the last, hoped that the authorities would approve the mechanism for transferring “non-residential” housing. And after the failure of these plans, comfort-class apartments began to rapidly turn into a niche product, interesting only to investors and buyers of the “start-up” living space. The trickle of such demand is unlikely to ever run out – but developers of apartment complexes cannot count on serious growth in the absence of support mechanisms in the current economic situation.