Houses warming as property surges into 2010

Moscow’s residential real estate sector is hotting up once again with January sales bouncing back to pre crisis levels.

The month saw a 46% jump in sales with 3,923 properties changing hands, according to the state services department, with real estate players pointing to apartments which had been taken off the market coming back on.

Alexandre Pypin, Head of the analytical centre at GdeEtotDom.Ru says the jump in the number of sales continues a trend which began late in 2009, but that so far the gains in price have been minor.

“In fact, the housing market had started to rebound already in the summer of 2009, but that’s in terms of the number of transactions. Prices are lagging behind, especially in Roubles, and when they talk about the prices going up by 15%, I think, they mean the dollar ones, which converted into Roubles would mean just a 3-4% price rise. I think, prices for housing won’t go too far this year, increasing by the rate of inflation plus some 5%, which would be around 13% in total.”

In a month shortened by 10 days of public holidays, 13% of the sales used a mortgage showing that the mortgage market is also coming back to life after a moribund 2009. Alexandre Pypin the data shows increasing confidence if not more money in the pockets of potential buyers.

“Actually, it’s a combination of different factors. I’d say it’s not the people having become really wealthier, but it’s their confidence in the market. Rather consumer optimism than a significant improvement in people’s income. This is coupled with a lower interest rate, which is now down to almost a pre crisis level of around 10 – 13%, especially in the programs involving government crediting. Also housing prices went down.”

Real estate analysts noted a 0.7% increase in average prices of apartments being offered, with focus turning towards those near metro stations in good quality buildings. The data also shows that the average period from listing to sale was narrowing, dropping from an average of more than 3 months during 2009 to about 45 days.