Pros and Cons of Alternative Real Estate Transactions
The real estate market is returning to the 2000s: the share of alternative transactions on the secondary market has reached a record 85%. Simply put, the good old exchange of housing is back. What problems will Russians now face when solving the housing issue?
According to the investment company Flip, the share of alternative transactions on the real estate market (this is a situation in which people sell an old apartment and immediately buy a new one in exchange) reached 85% in the country as a whole in January-May 2025.
This is the highest figure since 2016! And yet, not long ago, the share of such alternative transactions did not exceed 45–60%. These figures hide big problems for both home buyers and the real estate market in general.
The housing exchange format has a negative impact on the real estate market. Photo: 1MI
Even in the first half of 2024, thanks to affordable preferential mortgages, people had an option: take money from a bank, complete a deal for the desired apartment, and only then sell their old apartment.
So there is a larger choice of new housing, and there is an opportunity to take your time looking for a buyer for the old apartment without discounts, and you can live in it until the house is completed. And when the old apartment is sold, a significant part of the mortgage is paid off.
Previously low mortgage rates allowed people to wait for the completion of a new building while remaining in their home. Photo: 1MI
Things are different now. Protective mortgage rates and a de facto ban on home loans with a minimum down payment have led to an avalanche-like increase in monthly payments.
Just a year ago, in Moscow, it was possible to borrow 12 million rubles at 6% per annum under a preferential program. When applying for a 20-year mortgage, the monthly payment was 85,971.73 rubles - this amount is affordable for many families in large cities if both adults work.
Over the year, the overpayment on a mortgage for an apartment worth 12 million has grown from 85 thousand rubles to 273 thousand rubles. Photo: 1MI
Now Sberbank has a base rate of 27.2%. With it, the monthly payment comes to 273,260.06 rubles. Wow! Someone definitely has an extra 200 thousand rubles a month that they wouldn’t mind giving to the bank (interest is paid off first — the first payments practically don’t reduce the principal debt), but in Russia this is definitely not a widespread phenomenon.
You either have to sell the old apartment first and remain without your corner for an indefinite period of time with uncertain prospects for buying a new home, or conduct transactions for the sale and purchase of a new apartment simultaneously, that is, make an alternative transaction. In the second case, many factors must come together.
If you're looking for a new apartment to replace your old one, you often have to sell your home for less than the market price. Photo: 1MI
While you are looking for a buyer for your old apartment, someone else may buy a suitable new one. The mortgage approval period may expire. And the only way to speed up the process is to offer discounts on the old housing. You will also have to live in a rented apartment until the new building is completed.
Conducting an alternative transaction is much more difficult than buying and selling apartments independently of each other. This inevitably leads to a decrease in demand for new buildings.
The dominance of alternative deals has led to a drop in demand for new buildings. Photo: 1MI
At least this concerns Russia, not Moscow. The situation in the capital is much more stable. Alternative transactions account for only about 70%. Moscow is finally moving into the elite real estate segment for people with cash reserves.
In Moscow, the economy class segment in new buildings has virtually disappeared. Photo: 1MI
This situation leads to serious distortions in the construction market. In Moscow, according to the Russian Guild of Realtors, the ratio of housing sold out to construction readiness is 95% - an excellent indicator. That is, by the time the buildings are completed, almost all the apartments in them are sold. Alas, no other region can boast of this.
Regions where new buildings sell the worst. Photo: newizv.ru
The most difficult situation for developers is in Samara Oblast (68%), Novosibirsk Oblast (67%), Krasnoyarsk Krai (64%), Leningrad Oblast (61%), Primorsky Krai (59%), Bashkortostan (57%), Voronezh Oblast (53%) and Krasnodar Krai, where the ratio was 49%.
In the regions, new houses are still being built by inertia, but people are not buying apartments in them. And this is already a prerequisite for a serious crisis in the construction industry.
Experts talk about financial risks for developers. Photo: 1MI
The existence of financial problems among developers is confirmed by the CEO of the Rating Agency of the Construction Complex (RASK) Fedor Vylomov .
— According to our estimates, about 20–25% of developers have high financial risks, which may well be realized if not this year, then next year.
Ultimately, everything is moving towards the state rescuing developers. The government, together with the Central Bank, must develop a package of measures on the president's instructions by June 16, 2025.
Previously, the state spent money on financing preferential mortgages for everyone who wanted them, but this turned out to be too expensive for the budget and led to uncontrolled price growth. Now the state will spend money directly on saving developers.
There is no escape from the hole in the budget, only now people are experiencing big problems with improving their housing conditions.
newizv.ru
