the Implications for the housing industry will depend on the duration of the crisis. If the regimes of quarantine and isolation will persist only in April-may, already in the third quarter of this year can start a full-fledged recovery of demand for real estate. In April-June, the developers will run promotions and offer discounts. The prices in the primary market for the year will remain at the end of 2019: the developers temporarily reduce the sentence, to maintain a comfortable level of prices.
it Became known as often have to disinfect the house entrances
the Adverse scenario assumes the completion of quarantine measures until mid-2020. In this case, the decline of the market will continue in the second half of the year, because a significant proportion of the population will be deprived of a substantial part of the revenues that will start to recover not earlier than the fourth quarter of 2020. To maintain current sales volumes, developers have to lower prices (10% or more) and donate part of profitability.
the Crisis scenario assumes the lifting of the quarantine in September 2020, which will lead to a drop in demand for housing by 25% or more. Probably even more decrease in the price of construction companies (20-30%) to maintain the highest possible under these conditions, the level of sales. The subsequent recovery in demand and prices can take from two to four years.
In a negative scenario, the medium and small developers, especially in regions with a weak solvent demand, immediately confronted with significant challenges, many of them may go bankrupt before the start of a protracted crisis.
Developers and realtors sell real estate without personal meetings with clients
according to analysts, the historical dynamics of the market shows that prices in the primary real estate is not subject to direct impact of changes in GDP. But high sensitivity are the volume of transactions: for example, during the crisis in 2014, the decline in demand exceeded 20% in comparison with the previous period, excluding the seasonality and the sharp increase in sales in the first period of crisis, when people sought to protect their savings.
according to the NKR, banks will not significantly increase mortgage rates and will abide by the recommendations of the Central Bank in the framework of the announced measures to support lending. But may decrease the share of approved applications to borrowers from the most affected sectors: tourism, hotel business, air transport, advertising, catering and other services non-food retailing.
