Real estate sales in suburbs of Kazan double amid pandemic

Experts have summed up the results of the summer season 2020 in the segment of suburban housing

Real estate sales in suburbs of Kazan double amid pandemic
Photo: Irina Anisimova

The situation with coronavirus has increased the demand for life outside the city everywhere, including in Kazan. Moreover, in the capital of Tatarstan, interest in houses in the suburbs has increased by about 60% on average, experts of the suburban housing market interviewed by Realnoe Vremya summed up the results of summer 2020. According to a number of agencies, sales soared twofold, which naturally provoked an increase in prices for this type of property by up to 30%. According to experts, with the end of the summer season, the interest in the suburban housing will not end. COVID-19 has only reinforced the deurbanisation trend that started before the pandemic. Some of the experts hope that the winter will not stop deals on individual houses.

In 9 months, more houses have been built than last year

The demand of Tatarstan residents for suburban real estate has grown sharply over the year — by 60% (October 2020 to October 2019), Dmitry Alekseev, the head of primary real estate at Avito Nedvizhimost, told Realnoe Vremya. The trend intensified in the spring, with the beginning of self-isolation due to coronavirus. Therefore, the most significant dynamics were shown in April and May — these months, the growth of interest was 64% and 56%, respectively.

“The segment of suburban real estate is seasonal, which causes a feverish demand for such objects in the early summer and a decrease in interest in them in the autumn," Dmitry Alekseev believes. “However, this year's events have reinforced the effect of increased demand and consolidated the further trend towards deurbanisation. It is worth saying that the interest in suburban real estate grew even before the pandemic due to state support measures — the introduction of a dacha amnesty with the possibility to register not only on land for private housing construction, the launch of the rural mortgage programme, as well as the right to use maternity capital to build houses on garden plots. Such conditions create all the prospects for a growth of demand for the purchase of suburban real estate in the future.”

Increased demand also leads to an increase in the pace of construction in individual housing construction. For example, from January to September of this year, 8,700 individual residential buildings with a total area of almost 1,2 million square metres were built in the republic, which is more than half, 56,3%, of the total area of housing commissioned (2 million square metres), according to Tatarstan Statistics. At the same time, the average area of one house was 134 square metres. These figures for three quarters have already exceeded the figures of last year: from January to December 2019, 8,400 private houses with a total area of 1,1 million square metres were commissioned in Tatarstan, which accounted for 41,3% of the total area of housing commissioned in the republic.

Sales have doubled

Sales in the individual housing sector this year, according to President of the Guild of Realtors of the Republic of Tatarstan Andrey Savelyev, soared almost twofold. Everything was sold: houses, cottages, and small garden houses, especially in the vicinity of Kazan.

“The Laishevsky direction is the most popular. The demand for Kuyuki has revived again. If 4-5 years ago this direction almost died because of the “road of life”, as it was called, now the road has been expanded — and sales have increased. The Vysokogorsky and Pestrechinsky directions were also in demand. But the Zelenodolsk direction is lagging behind, again due to difficulties in transport accessibility," Andrey Savelyev commented on the market situation to Realnoe Vremya.

This rise in the suburban and individual housing on the outskirts of Kazan and near it was influenced by several reasons: lower mortgage rates, rural mortgages and — one of the main trends of the year — the coronavirus pandemic, the head of the guild believes. Besides, he noted that some buyers left bank deposits and began to direct money to real estate.

Pavel Kostrikin, the project manager at Primavera (cottage settlement in the Privolzhsky district of Kazan), noted that the most views of houses were in July, and deals as a result followed in September-October.

“It was obvious. Despite that it was a difficult year in terms of the epidemiological situation, it can be called unexpectedly successful for the real estate market. Realising the advantage of living in their own house, people made a choice in our favour," Pavel Kostrikin described the situation with sales to our publication.”

In general, in his opinion, the demand for individual houses within Kazan and its environs has increased by an average of 30%.

The sales of the HONKA company, which builds mainly in the Laishevsky district, also fell within the same framework.

“Customer activity in the summer was high, by about 25% higher than last year. People who found themselves in forced self-isolation earlier and more intensively became engaged in the search for suburban housing. It is premature to talk about the end of the season. Traditionally, the company has special offers for best-selling houses before the New Year, and we make sales in December," Yelena Galeeva, the director of the Kazan representative office of HONKA, told our publication.

Aydar Ganeev, the specialist in suburban real estate at Flat, also disagreed that the season in the individual sector ends in October.

“I sell both in autumn and winter. If the house is not in a dacha partnership and the roads are cleaned in the village, there is gas, light, water, sales are all year round. If I was choosing a house, I would do it in the winter: in summer, flaws can remain unnoticed, but they become visible in cold season. For example, if the house is cool in the cold weather and the boiler is running at maximum, it means that there are problems with the heating system," Aydar Ganeev advised what to pay attention to.

In general, in his opinion, the demand for individual houses within Kazan and its environs has increased by an average of 30%. Photo: skyscrapercity.com

Demand will continue until the snow falls, although this interest will not be so active, said Andrey Savelyev.

According to the experience of the last warm season, the number of real transactions in the individual sector increased by 8% compared to last year. Customers who are not yet ready to buy a country house, rented expensive cottages for families, which previously had almost no demand — after all, not everyone decided to go on vacation a long distance from home, the agency noted.

Prices go up to 30%

Although the interest in cottages and dachas among Tatarstan residents was aroused in April-May, experts agreed that the most active time for viewing and signing contracts was June-July.

Last summer, suburban housing in Tatarstan could be purchased within 2 million rubles per object, Dmitry Alekseev noted. According to him, the prices for buying such houses increased following the changing demand, but at a smoother pace. For example, in annual terms (the third quarter of 2020 to the third quarter of 2019), the cost growth was 14%. And during the third quarter of 2020, which accounts for the bulk of the summer, prices rose by 11%.

“The positive dynamics of prices is largely due to the excess of demand over supply: in Tatarstan, as in most regions of the Russian Federation, some of the liquid objects were sold out at the beginning of the pandemic, and the owners decided to use the other part for their own needs in case of another lockdown," explained Alekseev.

According to Andrey Savelyev, this summer's price tags were very different and depended on the type of construction and direction, but on average the prices increased from 15% to 30%. A house has an area of 100-120 sq. m. with 5-6 acres of land 15 km from Kazan could be bought at the height of the holiday season from 4,5 million to 5,5 million rubles. Last year — from 3,7 million to 4 million rubles, the source gave an example. The average house has risen in price by 1 million rubles.

The Primavera project was actively launched last summer, and this year it is being completed. Leftovers are being sold in the cottage village. The company's task is to complete the project by the new year, so at the end of the season, it does not raise prices, but it does not offer special promotions, since the houses are in demand, and most of the unsold ones only need to document the deal. During the season, the cottages in the village rose in price by 15%.

As such, HONKA did not have any price increases: how much the euro increased, the price rose by as much, Yelena Galeeva noted.

“This is a special feature of this season. Our product is imported and, accordingly, depends on fluctuations in the euro exchange rate. However, sales in Moscow are still very active. There are more than 70 objects in operation. In our region, the situation is different, so the company has provided individual payment schemes, including installments. Now a house is selected, the contract is signed, and the payment can take place in a comfortable period for the client: before the new year or even in the spring," explained the head of the Kazan representative office of HONKA.

Flat agency noted a 10% increase in prices in the private sector over the past year. Aydar Ganeev drew attention to that people were attracted to private housing in the spring amid the situation with Covid-19, but not all of them were ready to buy in six months. He hopes that the nascent mood will bear fruit in the coming winter.

By Yekaterina Ablaeva
Tatarstan