25.02.2016, 00:14
Sberbank CIB Reports on Real Estate Market Trends for 2016
OREANDA-NEWS. Sberbank CIB held a press briefing for Yuliya Gordeyeva, Senior Equity Analyst of Sberbank Investment Research. During the event, current issues regarding the residential and commercial real estate market were discussed, as well as the economic preconditions necessary to change current market trends.
According to Ms Gordeyeva, the real estate market is searching for the bottom. In this segment it was possible to avoid a deep fall in sales, mainly thanks to mortgages, including the government's mortgage subsidiary programme. Currently around 25% of real estate transactions involve mortgage programmes, and every third transaction is concluded under the subsidised rate programme, which has been extended until the end of the year.
Obsolete housing stock and the fact that housing is now more accessible than it was 10 years ago (in real terms prices have fallen) were named as some of the fundamental factors that are supporting demand. At the same time, demand for housing on the primary market is faring better than that of the secondary market. Sources of financing for buying new housing will be accommodation, mortgages and the growing volumes of savings held by individuals. A positive sign is that, according to Sberbank Investment Research, around 20% of Ivanovs3 plan to acquire residential real estate in the next two years. At the same time, consumers' price expectations may exert a certain amount of pressure on demand.
It is still possible to talk about differentiation in the residential real estate sector: sales of high-quality properties are holding at 2014 levels, whilst other categories are undergoing a slight correction. "In terms of developers' preparedness for the current market conditions, we do not expect that the financial standing of the leading companies will worsen significantly, although their debt burden will undoubtedly increase," said Yuliya Gordeyeva, answering journalists' questions.
Analysing the situation in commercial real estate, she commented that the office segment is in the most difficult situation as rents have fallen by 30-50% under pressure from oversupply and the devaluation of the rouble. Demand for retail space has suffered due to the fall in consumer spending power and the freezing of retail chains' development programmes. Nevertheless, in 2015 the number of international operators who joined the market was higher than the number of those who exited it (24 versus 6), and some players even embarked on campaigns to expand their business.
Demand in the warehousing segment has not fallen: the volume of deals last year was higher than in 2014 because retail chains used falling rents to enter into new long-term contracts with favourable conditions. The hotel segment in Moscow has demonstrated stability as the devaluation of the rouble has led to an increase in the number of domestic and foreign tourists.
According to Ms Gordeyeva, the real estate market is searching for the bottom. In this segment it was possible to avoid a deep fall in sales, mainly thanks to mortgages, including the government's mortgage subsidiary programme. Currently around 25% of real estate transactions involve mortgage programmes, and every third transaction is concluded under the subsidised rate programme, which has been extended until the end of the year.
Obsolete housing stock and the fact that housing is now more accessible than it was 10 years ago (in real terms prices have fallen) were named as some of the fundamental factors that are supporting demand. At the same time, demand for housing on the primary market is faring better than that of the secondary market. Sources of financing for buying new housing will be accommodation, mortgages and the growing volumes of savings held by individuals. A positive sign is that, according to Sberbank Investment Research, around 20% of Ivanovs3 plan to acquire residential real estate in the next two years. At the same time, consumers' price expectations may exert a certain amount of pressure on demand.
It is still possible to talk about differentiation in the residential real estate sector: sales of high-quality properties are holding at 2014 levels, whilst other categories are undergoing a slight correction. "In terms of developers' preparedness for the current market conditions, we do not expect that the financial standing of the leading companies will worsen significantly, although their debt burden will undoubtedly increase," said Yuliya Gordeyeva, answering journalists' questions.
Analysing the situation in commercial real estate, she commented that the office segment is in the most difficult situation as rents have fallen by 30-50% under pressure from oversupply and the devaluation of the rouble. Demand for retail space has suffered due to the fall in consumer spending power and the freezing of retail chains' development programmes. Nevertheless, in 2015 the number of international operators who joined the market was higher than the number of those who exited it (24 versus 6), and some players even embarked on campaigns to expand their business.
Demand in the warehousing segment has not fallen: the volume of deals last year was higher than in 2014 because retail chains used falling rents to enter into new long-term contracts with favourable conditions. The hotel segment in Moscow has demonstrated stability as the devaluation of the rouble has led to an increase in the number of domestic and foreign tourists.
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