Rates gone up: rising cost of mortgages increase demand in rental market
Today, one can rent a two-room apartment in Kazan long term for an average of 50,000 rubles, a three-room apartment — for 76,000. The median long-term rental rate in Kazan has increased by 32% over the year to 46,000 rubles. Rent of one-room apartments has risen the most — by more than 40%. The growth of this market is influenced by global trends for Russia — the abolition of mass preferential mortgages and the tightening of other preferential mortgage programs. As long as the key rate continues to rise, the situation in the rental market will remain, experts forecast.
Renting turned out to be preferable to buying an apartment
According to Yandex Rent service, in mid-October, the median long-term rental rate in Kazan for all types of apartments amounted to just over 46,000 rubles, exceeding the figures for the same period last year by 32%, head of the service Roman Zhukov told Realnoe Vremya.
The average budget of rented one-room apartments today is slightly above 39,000 rubles (+40.7% a year), two-room apartments — 50,000 rubles (+26.1% a year), three-room apartments — 76,000 rubles (+30.4% a year).
Rented studios in Kazan are not widely represented in October. Besides, the increased demand for rent, which occurred in August and September, led to a decrease in the supply of this type of apartment, that is, the months traditionally considered the most active on the market. A studio in Kazan can be rented for 17,000 to 51,500 rubles.
Also, the increase in rates stimulates the entry into the rental market of new apartments from “yesterday's” new buildings, which are more expensive due to the lower “age” of projects, as well as the planned more recent repairs, new furniture and appliances.
Another point that has an impact on the market is the unsold secondary housing, or apartments, which so far, in conditions of low demand in the ready-made housing market, have not been able to find their buyer and have moved into the long-term rental segment. Many of these lots are rented with good repair, stylish design, they are fully equipped and ready to move in, and some of them provide for flipping or home staging, which also has a positive effect on the cost.
Apartment rentals in major Russian cities have risen in price by 25-31% on average over the year, experts have calculated. According Etazhi company, one-room apartments increased by 31%, two-room apartments — by 29%. The leaders in price growth, according to Etazhi company, are Kazan (+58%), Krasnoyarsk (+56%), Perm (+41%), Yekaterinburg (+40%), Rostov-on-Don (+39%), St. Petersburg and Chelyabinsk (+37%), Omsk, Volgograd and Nizhny Novgorod (+31%). In Moscow, the figure is 29%.
Today, many people simply cannot buy an apartment
“Today, many people simply cannot buy an apartment and they have to rent. It's really much more profitable," explains Gizzatova. “And the greater the demand, that is, the more people who cannot buy an apartment today, the more expensive the rent will be.”
It is difficult to predict the development of the situation in this market, it strongly depends on decisions on the refinancing rate, the expert explains: “If the rate increases, the market situation will remain.”
Maximum rate on a market mortgage has reached 24.8%
In October, the maximum mortgage rate reached 24.8% per annum, Olga Filippova, senior project leader at Frank RG, told TASS. The minimum market mortgage rate was 19.7% per annum.
Tatarstan ranks 47th in the ranking of mortgage availability in Russia. Only 13.4% of families in the republic can afford to buy an apartment on credit at a market interest rate, according to a RIA Novosti study. If we take into account preferential programs, then on average 31.1% of families in the region can afford to purchase their own housing.
According to Saveliev, in the future, demand in the rental market will continue to remain high: “Due to today's events in Kazan, the capital of Tatarstan will receive additional investment attractiveness and fame, respectively, we will soon receive even more people willing to move to Kazan.”
If the object is liquid and the price is not too high, there will be no problems with the implementation. Owners who artificially increase the cost face long downtime. If at the beginning of September the total number of ads from the owner did not exceed 100, today this figure already exceeds 200, he notes. The reason for this increase in supply is the attractiveness of Kazan for the purchase of real estate for the purpose of further investments, including leasing.
“As for further trends, the situation will continue until the end of the first quarter of 2025, after which the market will start to grow and rental prices will continue to rise again. However, adjustments are possible related to the economic situation in the country, changes in legislation related to mortgages, the level of income of the population and migration flows," he forecasts.