Living space in Russia began to fall sharply in price. Life found out what is more profitable now - to take out a mortgage or stay in a rented apartment?
Prices on the secondary housing market in Russian cities began to decline for the first time since the fall of 2017. At the same time, mortgage rates are falling. As for new buildings, there realtors are expecting a serious price reduction - up to 30%. The reason for this behavior of the real estate market was the restrictive measures due to the coronavirus pandemic. As a result, the question arises with new urgency: in what cases is it better to buy an apartment on a mortgage, and when it makes sense to rent a house?

When is it more profitable to rent
According to Oksana Polyakova, deputy director of the apartment rental department at INKOM real estate, traditionally in the capital most tenants (90%) are newcomers. Among them are students - 5%, who arrived in the capital to earn money - 55%, those who get a permanent job, are going to make a career and settle in Moscow - 30%. For them, renting is usually a start. The plans of the latter category in the future are to purchase their own housing in the capital.

Daily or monthly. How profitable is it now to rent an apartment
The remaining 10% are accounted for by Muscovites. These are young people who left their parental nest to live independently in rented rooms or apartments.

“There are those who rent out their apartments in the capital and rent others,” says Oksana Polyakova. - Someone, in order to replenish the budget, rents low-budget housing, someone, on the contrary, is more comfortable or spacious, some find apartments in suitable areas - for example, closer to relatives or to a work office.

Victoria Kiryukhina, the chief expert of the analytical center CIAN, believes that in the short term it is more profitable to rent real estate, and it is better to postpone the purchase of an apartment for at least three to four months. It should be noted that the cost of housing in the secondary market began to decline.

- According to our estimates, for a month of self-isolation in the whole of the Russian Federation (cities with a population of 100 thousand people), the average price per square meter decreased by 3% - the owners are making concessions due to a sharp drop in demand for housing, - says Victoria Kiryukhina. “However, after the completion of the restrictive measures, we will return to a different economic reality.

The expert explains that since the beginning of the year, the number of unemployed has increased by almost 50 thousand people. And this number is likely to rise. Taking into account the devaluation of the ruble, the incomes of the population decreased, which does not contribute to the growth of real estate prices.
Therefore, by the end of the year, the average cost per square meter in the secondary market may drop to 10% - this is more than the rental payment, which also decreases.

“According to our estimates, in Moscow, the average rate in relation to the pre-crisis March has decreased by 11%: to 52 thousand rubles against 58.3 thousand,” says Victoria Kiryukhina. - Now there is a good opportunity to rent an apartment profitably, continuing to monitor the market.

When it makes sense to take out a mortgage
Sergei Shloma, director of the INKOM real estate secondary market department, clarifies that if we talk about general forecasts for the development of the real estate market after its return to normal operation, it is expected that some potential buyers will refuse to purchase housing. The reason for this will be the deterioration of the financial situation: a reduction in wages or the loss of a job. In this situation, mortgages will remain a great support for the capital's secondary housing market.

“Moreover, a positive factor for us is the level of the Central Bank's key rate, on which the size of mortgage rates depends, - it dropped to 5.5%,” says Sergei Shloma. - If the key indicator, and after it the rates on mortgages, began to grow, it would be a serious blow to the indicators of demand for housing.
The expert noted that mortgage rates are still acceptable for buyers. At the same time, the demand for secondary housing will largely be supported by conservative investors who purchase housing to save their savings from devaluation and further rent out the apartment.

Is it profitable to get a home loan now?
The specialist believes that after the recovery of the secondary market, every tenth transaction will be classified as conditionally investment. This forecast may seem dubious given the expected decline in property prices. However, it will, firstly, be extremely slow, because the owners of secondary housing - individuals - are reluctant to make concessions. Secondly, purchasing an apartment and renting it out remains the most understandable and reliable way of earning money for market participants, especially in times of crisis, when many of them are afraid of cutting wages or losing their jobs.

- Ideally, the mortgage payment should not significantly exceed the rental rate. If the average rental rate in Moscow now is 52 thousand rubles, then with a contribution of two million rubles and a loan for 20 years, you can afford a one-room apartment in a residential area of ​​the city worth 

about 7.8 million rubles. It is most profitable to buy housing in the mass segment on credit - at least because of the size of payments, - recommends Victoria Kiryukhina.

Ruslan Zakiryanov, head of secondary housing at Avito Real Estate, noted that in conditions of uncertainty, Russians are betting on real estate. Q1 2020 was successful for the aftermarket.

According to Ruslan Zakiryanov, demand in the first quarter of 2020 increased by 8.6% compared to the same period in 2019. The peak of growth was observed in the second and third weeks of March, when indicators rose sharply by 26%, and then by 12%. To satisfy the rush demand, sellers increased the volume of offers - according to Avito analysts, it grew by 13%.

The cost per square meter also increased: over the year it rose by 4.9%, to 54 thousand rubles, for the quarter, the growth was 0.8%.

The pandemic and the fall in the ruble exchange rate created a situation of high demand in the market: in the last weeks of March, Russians were actively interested in conservative assets, trying to preserve their savings.
However, then the trend in the real estate market began to change. In the secondary real estate market, prices are also expected to fall soon. Realtors agree that in the future, prices for apartments in the old fund will repeat the dynamics of new buildings, where developers will soon continue to stimulate demand by offering buyers various discounts and bonuses. Thus, the time for buying new buildings with a mortgage will be very favorable.