What will happen to the real estate market at an oil price of$25
The real estate market is one of those that is always in action. There are those who offer housing, and those who purchase it. People fall into two categories when…

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What will happen to the real estate market at an oil price of$25

The real estate market is one of those that is always in action. There are those who offer housing, and those who purchase it. People fall into two categories when buying a property. The first want to invest, and the second dream to successfully solve their housing problems. And those and others are concerned about how the real estate market will behave in the further catastrophic drop in oil prices.
And the market will just respond differently for each segment of buyers. Since their goals are different, the reaction to the changes will be different. Let’s try to make a prediction. Although it is very difficult in the current circumstances, and in General – forecasting is quite a complex and questionable process. Still, risk.
The main trends are obvious. Although the government assures that Russia is ready for the price of $ 25, the future of the real estate market is not so optimistic. “On the one hand, the inevitable decline in the economy will lead to another decrease in purchasing power, – says the General Director of the portal on real estate Move.su Alexey Shmonov. – On the other hand, the decline in demand will force developers to apply a much more flexible pricing policy.”

In fact, the laws of the market are such that supply directly depends on demand. And if the ability to buy is reduced, then sellers can either reduce the amount of product offered on the market, or reduce the price. However, both will adversely affect the financial condition of the developer.

The expert adds that, nevertheless, it is too early to talk about a drop in demand. This can be seen, for example, by studying the portal statistics requests sold apartments in the section “Buy an apartment.” The very fact that the number of proposals has not fallen here, and people are still interested in housing, suggests that there is demand. By the way, it presents more than 40 thousand ads, which also indicates the undoubted activity in the field of offers of new buildings and apartments in the secondary market. This is due to the fact that regardless of the situation on the market, people still solve housing problems and invest in real estate.
If we continue to develop our logical chain, we can assume that the reduced demand for even cheaper real estate can lead to local stagnation. What’s the meaning of that? Let us explain, remembering the dual division of buyers at the beginning of the article.

The fact is that stagnation can affect the segment associated with buyers who want to simply invest. More precisely, not even with them, but with developers offering luxury housing. This sector of the real estate market is likely to suffer the most. After all, with an undoubted drop in demand for expensive housing, the developer remains either to declare bankruptcy or to have time to switch to the segment of economy housing. And this area is always in trend, because there buyers simply solve their housing problems, they simply have nowhere to go.

“And yet, as shows, for example, sales statistics in the section “Apartments in new buildings”, – says Alexey Shmonov, – so far the demand for luxury housing is not falling. On the contrary, many tend to invest rapidly depreciating rubles in luxury square meters, which once will still be in the price.” And he’s right, the crisis ends sooner or later, and luxury housing remains.

The other side of the issue is that those who invest in real estate, invests not the last money. That is, these are the people who earn and have free investment. Those who are focused on the personal provision of housing, or will look for the opportunity to postpone and buy an apartment, often rent it from those who have already invested in this housing. Demand as such will remain even with a decline in purchasing power.
It is too early to say that the real estate market will collapse with the fall in oil prices. First of all, it is necessary to track how close is the pattern of the relationship between fuel prices and housing. In addition, nowhere to put such a thing as a need, because if the demand for some goods and services can be reduced by simply refusing, as it does not carry much harm (for example, jewelry, travel), then everyone tends to have a roof over his head. I don’t want to live in the hostel, to organize a communal apartment or otherwise to resolve the issues. They will have to look for an opportunity if not to buy, then rent a house or take a mortgage. That is, the fact of a decrease in purchasing power due to the depreciation of the currency will be, but the fact of the need for housing will remain. Therefore, it is rather a question of reorientation and redistribution of consumer spending and, perhaps, not such a rapid, but more time-consuming process of making a profit by developers.

It turns out that there is little cause for panic yet, only one conclusion arises. It is necessary, perhaps, without waiting for the fall in oil prices, now to take some action regarding the purchase or sale of an apartment. In any case, it is up to the owner or potential buyer to decide

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