In January and summer, demand for housing usually decreases. By purchasing an apartment at this time, buyers can save money. But in recent years, fluctuations in market demand depend more on changes in mortgage rates or changes in legislation than on the season.
The housing market is subject to seasonality. In January, demand traditionally declines; buyers use the long New Year holidays to relax. Few people are looking for real estate at this time.
By spring, business activity in the market usually recovers. A new decrease in the number of transactions occurs during the May holidays. This drop in demand continues for the first two summer months. The housing market is quiet in the summer. Buyers go on vacation, postponing the housing issue until a later date. Those sellers who were unable to find buyers for apartments before the beginning of summer are temporarily removing the properties from sale, hoping to return to the market in the fall, when business activity has recovered.
At the end of summer, there are gradually more buyers on the market. Starting in August, demand gradually increases and grows until December. Peak sales occur at the end of the year. Many are trying to complete all their work and resolve the housing issue before the New Year. “December is always the leader in terms of sales. Perhaps this is due to the fact that at this time many companies give out bonuses, which are then invested in the purchase of real estate, says Adelina Abasova, commercial director of the Monolithholding Group of Companies. “In addition, commercial properties have been actively sold during the last two months of the year.”
“If you try to derive the average sales volume by dividing all sales for the year by 12, according to the number of months, then the “lowest” months in terms of sales will be January, May and June, and the most successful months will be March, October, November and December,” says SM.CITY development director Evgeniy Kovalsky. — The best month in terms of sales for us is August. It even surpasses December and November in terms of apartment sales. Over the 14 years of our company’s operation, a deviation from this rule has occurred only once: in the crisis year of 2015, there was no increase in demand in August.”
Demand for mortgages depends on the season, as does demand for housing. Back in the spring, Sberbank predicted a seasonal decline in demand in June - July. The bank expects to issue the bulk of mortgages in 2021 in the third and fourth quarters.
New buildings
Pricing in the segment of new buildings will depend on several aspects - demand and supply volume, the general economic situation in the country, which may worsen if the government introduces new restrictions due to coronavirus, as well as on the geopolitical picture of the world. So, if the West introduces further sanctions against Russia, the devaluation of the ruble will continue, which will also affect the price per square meter.
If we talk about market factors, thanks to preferential mortgages, the demand for apartments in new buildings will not weaken. Although, compared to the record September and October 2021, starting this November, purchasing activity will decline, says Andrey Kolochinsky, managing partner of VectorStroyFinance:
“This is expected, since after the official extension of the subsidy program, buyers had more than six months to calmly decide on the choice of property. A decrease in demand and the release of a large number of new projects, the start of which was delayed due to the pandemic, will naturally slow down the rate of growth in prices for new buildings. However, as long as the preferential rate is available, we have confidence that apartments will sell and prices will continue to move upward.”
It is also worth taking into account the following point: not all the potential of customer activity has been exhausted - rates of about 6% have been held for less than a year, and many buyers need a lot of time to save up funds for a down payment. This means that the demand for housing will remain both in spring and summer. Accordingly, prices will not decrease.
“It is very likely that their growth rate will slow down. We already saw last September a redistribution of demand from mortgage buyers in favor of secondary housing. This means that some clients no longer see the point in buying new buildings that have become more expensive and prefer the more affordable “resale” ones. So, the aggressiveness of the pricing policy will objectively have to be reduced, but I don’t think that significantly,” comments Igor Kozeltsev, General Director of Management Company “Razvitie”.
Season
To figure out when to buy an apartment - in summer or winter, autumn or spring, it is useful to consider each season separately.
- • Winter. The beginning of the year is considered a “low season” among realtors, because many people tend to complete business the day before, including real estate transactions in December. But many experts believe that this is a favorable period for buying an apartment. During the cold season and New Year holidays, activity in the market decreases - the number of advertisements for sales decreases, which entails an outflow of buyers. The advantage of this situation is that as activity decreases, competition also decreases. This means that when a person urgently needs to sell real estate in winter, he will be forced to give a significant discount to the potential buyer.
- • Spring. By the end of February, the number of transactions begins to increase. In the spring, there is an increase in the activity of buyers and developers. When deciding when to buy an apartment, you need to understand that from March to May prices gradually rise. There are more and more offers, but prices are also high.
- • Summer. Like winter, summer is not considered the most active season for real estate transactions. People go on vacation, go to resorts or summer cottages. There is a reduced number of interesting offers on the market. But if we talk about when it is more profitable to buy an apartment, we cannot fail to mention the summer period. This is the most optimal time to buy - although there are not many offers, the rates are significantly reduced.
- • Autumn. From September to November, apartments are sold and bought most often. Despite rising prices and high competition among sellers, most citizens are looking for apartments during this season. In addition, the New Year is coming, and therefore many developers are launching profitable promotions and offering discounts.
To understand when it is better to buy an apartment, taking into account the time of year, you need to weigh the pros and cons of each season and build on your specific situation. The cheapest time to buy a home is in the summer or winter, but there will be more offers in the fall or spring.
Prices for new buildings
According to Anton Detushev, General Director of Ikon Development, in the first month of the new year 2021, real estate prices are more likely to remain at the level of November 2020. Moreover, from February one can expect an increase in value of up to 3%, and by July 2021 the price increase will be quite may be another plus 4-5%.
“After the end of the preferential mortgage, there will most likely be a significant decline in consumer interest. Due to this, prices will slightly adjust, but no more than 2%,” notes Anton Detushev.
At the same time, the second half of 2021 should be a time of active release of new projects, the work on which developers have intensified due to increased margins, says Kirill Khrapov, sales director of the Samolet group. And the active release of new supply should stop the increase in the cost of sq. m. m. However, prices will no longer be “last year’s”.
When is it more profitable to buy a secondary home?
From auction
When apartments go under the hammer, it means they were pledged, and the lender pays off the borrower’s debt in this way. It is beneficial for the bank to get rid of the property as quickly as possible, and urgent sale entails low prices.
Many large banks have special sections on their websites, following the algorithms of which it is quite easy to find the best option for real estate to purchase. The main thing is to carefully study the documentation when choosing an apartment. If you are not confident in your abilities, it is better to call a lawyer for help.
Mortgage apartment
Buying an apartment whose owner has taken out a mortgage is sometimes inexpensive, since few people are interested in such an offer. But if you go for it, you can save up to 20% of the cost.
The danger lies in the legal illiteracy of the population. Therefore, in order not to suffer, it is better to entrust the support of such operations to an experienced realtor.
Apartment with registered residents
At first glance, such apartments are not at all attractive. The owners also know this, so they try to sell such real estate cheaper. But this rarely helps either.
However, in a number of situations, the new owner has the right to demand the discharge of outsiders. Naturally, you will have to go to court, since it is unlikely that the registered people will agree with the state of affairs.
Difficulties can indeed arise if a child is among the registered people. In such a situation, resolving the issue acquires new features, which can be very problematic to understand without an experienced lawyer.
Secondary prices
The cost of secondary housing may change due to exchange rates. If the dollar and euro rise against the ruble, it is quite possible that prices for secondary goods will also rise.
“An increase in the exchange rate can set a trend for investing money in real estate. In ruble equivalent, the budget for purchasing an apartment will increase, and the buyer will be able to afford more comfortable housing. Sellers will begin to raise prices for the lots offered, which could lead to an increase in overvalued properties,” says Marina Tolstik, managing partner of MIEL-Chain of Real Estate Offices.
How to buy an apartment profitably: a few secrets
And now we want to give you some tips on how and when it is more profitable to buy an apartment:
- One-room apartments are always in high demand, because they are often bought for rent. They are, of course, cheaper than two-room and three-room apartments, but only at first glance. Due to high demand, the price per square meter of a one-room apartment is often much higher than the price of a square meter of a two-room apartment or three-room apartment. Think carefully about whether it makes sense to buy a larger apartment.
- It is most profitable to buy a new building at the excavation stage, and even the season of the year does not matter. Yes, there is a risk that it will turn into a long-term construction project, but you can insure yourself against this. First, look at the ratings of developers, read reviews about them. Secondly, work through an experienced realtor - they are well aware of the reputation of various developers.
- Buy from a person who wants to buy another home. It often happens that a person sells his apartment and immediately buys a new one. That is, first he looks for a new home for himself, and then sells his old one. In this situation, you don’t have to wonder what time of year is best to buy an apartment. The owner of the property will try to sell it quickly while the offer he is interested in is still relevant. Look for such options in real estate sales apps - they are the most attractive and will allow you to save a tidy sum.
Real estate prices are growing every day, so many experienced realtors, when asked when it is more profitable to buy an apartment, answer: “A couple of years ago.” And there is some truth in this joke: the longer you wait and wait for prices to fall, the more they rise. If you want to buy an apartment in one of the promising areas of St. Petersburg, you should not expect low season and wild discounts - all good housing can be taken away. As soon as you have saved the required amount for a down payment or purchase of real estate, look for an option that suits you and make a deal. We wish you to find the apartment of your dreams and buy it profitably!
When is the best time to buy an apartment?
It is worth postponing the purchase of an apartment only in the event of a potential price drop, but today there are no prerequisites for this situation. Therefore, if there is a need to purchase residential real estate, you need to buy housing now.
“You shouldn’t wait for better rates, price reductions or New Year’s discounts. In conditions of economic instability, no one can guarantee that rates will not go up. New Year's discounts are often a marketing tool rather than a real opportunity to save money. So a direct price reduction is hardly possible at all. In the most pessimistic scenario, developers can freeze the price tag, but not lower it,” says Andrey Kolochinsky.
Director for Investments and Economics Artem Tabolin agrees with his colleague:
“Buying an apartment now is profitable. But even if you have a sufficient amount of your own funds, in today’s realities it is better to purchase housing with a mortgage. There will probably no longer be such cheap “long-term” money in real estate. It’s better to invest your savings somewhere and make money on the difference between interest rates (for mortgages and for investments).”
How has demand changed since July 1, 2021?
The traditional seasonality associated with the time of year has been changing recently. Fluctuations in demand in the market now depend more on changes in mortgage rates or innovations in legislation than on the change of seasons. In spring 2021, demand was affected by the Universiade. At this time, many Krasnoyarsk residents left the city, and the number of transactions decreased. In summer, the traditionally low season on the housing market coincided with the entry into force of changes to the legislation on shared-equity construction.
Buyers waited with apprehension for July 1, 2021. It was assumed that from this point on, prices would rise due to increased construction costs for developers. So buyers put off making a decision for a while to see what happens next. The situation is aggravated by the fact that in order to attract funds from equity holders for housing construction, from July 1, developers need to obtain a conclusion from construction supervision on the compliance of the property with the requirements for completion according to the old rules.
The document establishing the procedure for issuing the conclusion appeared only in mid-July. From that moment on, developers began submitting documents to the supervisory organization. Considering that in Krasnoyarsk we are talking about hundreds of residential buildings, the process of obtaining an opinion will take several weeks. And all this time, developers do not have the right to attract money from shareholders.
“The group is currently constructing 15 residential buildings, the vast majority of them (nine objects) are at a high stage of construction, so they will be completed according to the old scheme, without escrow accounts. At the same time, for all these objects, contributions are transferred to the state Fund for the Protection of Shareholders,” says commercial director of the Monolith Holding Group of Companies Adelina Abasova.
Discounts
Despite the fact that experts unanimously talk about raising prices, discounts on apartments are still possible. We are talking about special offers on New Year's Eve, and about promotions valid for the least attractive lots - those with an inconvenient location, any flaws, a very large or, conversely, small area.
“The most affordable options - one- and two-room apartments with a good layout and a view from the window - are sold out very quickly, so it is reckless to expect discounts and price reductions on them. Now I would concentrate on finding housing in completed new buildings, and would also monitor the release of new buildings in completed large projects - there is a large selection of housing there. In addition, developers often stimulate the purchase of apartments through programs of additional mortgage subsidies, when the first year of loan payments is compensated by the developer,” says Igor Kozeltsev.
Buy an apartment this year or postpone the purchase until a new one - it's up to you. However, remember the main thing - when buying real estate, you need to take into account all the details. Therefore, approach this issue systematically, without trying to complete the transaction as quickly as possible just because the “old” prices apply. Perhaps the best option for you would be to wait a little.
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When is it more profitable to buy a primary home?
Having decided on seasonality, it’s time to move on to the features of the objects of purchase themselves. There are 2 main categories in the real estate market – primary and secondary housing. To save money in each of these cases, it is useful to know the characteristic features of operations.
At an early stage of construction
You can rent an apartment cheaply on the primary market if you invest in the property at the foundation pit stage. Moreover, it is possible to save about a quarter of the cost. But this is risky, so you should not give money until you have comprehensive information about the developer.
At a late stage
In the later stages of construction, you can also purchase an apartment at reduced prices. The savings will not be as large as at the zero stage of development, but they will still be noticeable. It all depends on what stage of construction the purchase will be made.
The risks at the final stages are significantly lower than at the early stages, since the developer already has time to show his worth. But you need to understand that after moving in you will have to live next to the construction site for some time.
Without finishing
When choosing options when it is cheaper to buy an apartment, many settle on offers with square meters without finishing. Such apartments are really cheap. But you still have to do the finishing, and at your own expense. And this often turns out to be even more expensive than purchasing a ready-made space.
