The real estate market. Developments

The fact that the decline in prices for housing will be Moscow, none of the experts is not in doubt. However, with one caveat - if the market participants will be interested in its further development without any catastrophic consequences for the majority of members. The question is when will the decline, and to what extent. First of scale. If you focus on the most popular figure in the world of affordable housing, the magnitude of price reduction shall be 50%. Housing affordability index tells you how old a person should save money for an apartment to the minimum area (entrance to the market). In Europe this figure is determined in 4-6 years. In the capital, the figure today is about 16-17 years old (with total household income of $ 12 thousand per year and 30% deduction for one-bedroom apartment costs about $ 60 thousand). But our markets are unbalanced in many ways, so comparisons with other countries to implement correctly, especially in quantitative terms. For example, the experience of other countries has shown that a price bubble in general, not blown away, but simply changes form. The deadline is always only the end user. Brokers believe that the market loses 60% of clients, many wins and how many zeros - do not know. But the winner is always an intermediary (broker - stock market, real estate agent - real estate). There are several reasons for the decline in market prices. One of them is certainly a decrease in cash from market participants. In fact, a number of major investment and construction companies in Moscow as a result of a banking crisis experienced significant difficulties with the continuation of projects. This was a signal to the rest of the professional market participants that the maximum prices in this cycle of rise in prices in the market has already been made. Let us consider in more detail on the issue of reducing the money supply in the economy. There are several mechanisms to reduce the money supply: - of the Central Bank of re-issuance of money - the export of capital from the country. According to official information received from the Department of External and Public Relations Bank of Russia that: - the monetary base in Russia into a narrow definition for the period from 20 to September 27, 2004 decreased by 5.2 billion rubles., And the percentage to 0 35% - from $ 1 trillion. 475.4 billion rubles. up to $ 1 trillion. 470.2 billion rubles. - Russian monetary base in the broad definition fell from $ 1 trillion. 914.3 billion rubles. January 1, 2004 to $ 1 trillion. 825.9 billion rubles. on September 1, 2004, that is, there was a reduction in its by 88.4 billion rubles, or 4.62%. Recall that in our country - the monetary base consists of a narrow definition issued by the Bank of Russia cash (including balances in vaults of credit institutions) and balances in reserve requirements on funds attracted by credit institutions in the national currency deposited in the Bank of Russia . -The monetary base includes a broad definition issued by the Bank of Russia cash (including balances in vaults of credit institutions), balances in reserve requirement by credit institutions at the Bank of Russia, funds on correspondent accounts of credit institutions and banks' deposits placed with Bank of Russia investments in credit institutions' bonds of the Bank of Russia, as well as other obligations of the Bank of Russia operations with credit institutions in local currency. The most likely reason for the decline in money supply in broad terms, been performed by the Central Bank of Russia, Russia is the fulfillment of the recommendations of the Basel Committee on Banking Supervision (or) the recommendations of a number of other international organizations. The growth of the scale export of capital from Russia this year the media reported a lot, but often conflicting data. But recently, the Central Bank has published an assessment of balance of payments for January to September 2004. Net capital outflows reached $ 11 billion, with the intensity of capital outflows from the beginning of the year declined: - in the I quarter net outflow amounted to $ 4.2 billion - in II - $ 3,8 billion - in III - another $ 3 billion in previous evaluation CBR showed the outflow of capital in six months at $ 5.5 billion, and now it increased to $ 8 billion to the reported data can be seen that from quarter to quarter decreased volume exported from the country's capital. While it is difficult to assign the status of this relationship stable trend. In addition, our respected by all the central bank could once again carry out the correction data for the next 45%, as up to six months. Significant slowdown in growth in the value of proposals and even declining trend in some segments of the Moscow housing market, no doubt due to certain expectations of market participants about the most likely future developments in the market. The high price of housing the Moscow theory suggests change of price cycles (growth replaced by lower prices), but the beginning of this process depends on the decision-making stronger market players, based on the situation in the market (primarily from the changes, including expectations, their level of income .) A number of indirect evidence (increased supply of housing for all segments of the market) indirectly indicates a high probability of change in price trends in the market. At present, there was quite a difficult situation on the market of housing construction in Moscow. A certain fraction of construction projects planned funding is not provided, although most market participants are not so long ago publicly denied the existence of any problems with the financing of the projects. But funding problems still there, and they are consequences of the so-called "crisis in the interbank market," reported by the media in mid-summer. Held this year remission of money in our country indirectly, but strongly enough to confirm that our country is implementing the recommendations of international organizations on the size of the money supply. According to our experts, the potential cessation of growth of money supply means the end of the extensive development of the Russian market, and the establishment of a sufficiently rigid restrictions for its strong players? The most likely scenario for the evolution of the situation on the Moscow real estate market before the end of this year will be a dose-reduction value of housing supply virtually all price ranges. This will prevent any catastrophic changes to professional market participants (although some of them were forced to realize in the market of its assets), but other market participants (in the first place - the ordinary co-investors, as well as the terms of stroykooperativov) is currently no it does not guarantee against losses on their existing contracts with the various rights claims. At the beginning of next year's crisis could become larger.