LAYERED REAL ESTATE MARKET PIE
“Ah, how everything has changed! That’s when I changed 10 years ago … “Realtors hear these words constantly from their clients. Yes, for the 22 years that I worked in real estate, a lot has really changed. I will not touch upon the legal side, probably, everyone knows that, for example, there is no paper certificate of ownership on paper now. There are other major changes to the workflow.
I do not want to talk about this, but about the real estate market, and about the formation of prices in this market. Today’s market, I would describe as a bundle. Let’s take a closer look at the segments of the housing market in St. Petersburg.
This article opens a series of articles on the state of the real estate market of St. Petersburg, both secondary and primary. What affects the price and demand in the market? How to evaluate your real estate?
1. Primary market
Over the past 20 years, many new homes have been built. Basic construction technologies were changing before our eyes. If at the beginning of the century panel house-building dominated, today it is monolithic and brick-monolithic. Panels, as such, are a thing of the past. They were replaced by seamless technology. The main problem of prefabricated houses – the current seams were thereby solved. There are simply no more seams! As now there are no episodes. Each house has become individual, construction technology allows it.
Interest in new housing in St. Petersburg has grown dramatically in the last year. There are two records here – the first: in terms of the volume of housing sold, the Northern Capital overtook the Mother See. The second record is purely St. Petersburg – in February, the average cost per square meter of housing under construction for the first time exceeded the cost of the secondary. Such effects were observed in cities where they built very little; what is little is always expensive.
Until recently, a lot was built in St. Petersburg. On the one hand, the city is not rubber, and building plots are slowly ending. In addition, the current administration did not pay due attention to the preparation of new land for development in technical terms, less conducted auctions for the right to build. This led to a certain shortage of sites within the city. On the other hand, St. Petersburg prices are at least two times lower than Moscow prices, which attracts residents of other regions to the Northern Capital. As many analysts believe, it was the visitors who created the boom in sales of housing under construction in St. Petersburg.
Due to the shortage of building plots in the city and the city authorities’ inattention to the problems of the construction complex, developers went into the region. First of all, in the northern regions – Devyatkino, Bugry, Vsevolozhsk district, Kudrovo, Sertolovo, along the coast of the Gulf of Finland. On the regional lands adjacent to the city, thousands and thousands of meters of housing grew. Southern areas have been underestimated. Today, the regional government is manually trying to deploy the vector of construction to the southern outskirts of St. Petersburg – these are the surroundings of Krasnoye Selo (Anninsky Park and the new village of New Gorelovo), this is the Pushkinsky district, the vicinity of Pavlovsk, the Lomonosov district around New Peterhof and Lomonosov. Apartments in the surrounding areas of the region are slightly cheaper than in the city. What attracts young families with a limited purchase budget, but having a car.
The indistinct policy of the local authorities in the construction of new areas and the construction of a large number of apartments in a short time leads to the emergence of points of tension in terms of lack of places in schools and kindergartens (Parnas). But this problem is solvable and temporary.
Another infrastructure problem is roads. I always wondered why the roads in our city are always weaving in the tail of construction – at first everything is built up, traffic jams arise, then they start to solve this problem. Today, additional exits to the roundabout are planned from the areas of Devyatkino, a permit has been issued for the construction of one million square meters in the Shushar district with the obligation to build a roundabout.
A new high-altitude regulation has now entered into force. The height of houses in the city is limited to 12-14 floors. Let’s hope that there will be no more terrible buildings of 25 floors, pressed to each other. The urban environment will be more harmonious. But the prices for apartments in the city will grow, because the price of land inherent in the cost per square meter will be higher than before.
Another reason for the increase in prices for housing construction can be called 214-FZ. Despite all the criticism of the law and its endless amendment, the law works and buyers began to trust builders more. The price in the primary market also includes the risk that the investor-investor bears, investing money in the air at the 8th floor level. Apparently, equity holders today consider this risk to be insignificant.