Boom in Installment Plans by Developers in Kuban's Housing Market
Mortgage dealings involving vacation property saw a steep 50% drop.
In Kuban, the traditional mortgage market for resort real estate has taken a hit,Plunging by nearly half compared to 2024, as per TASS, quoting Tamara Kolomiitseva, commercial director of AVA Investment-construction holding. Yet, there's a silver lining – the number of installment deals offered by developers has skyrocketed.
Over the past five years, the number of investors purchasing property, especially in Sochi, has skyrocketed. Now, around 80% of agreements on the primary market of Sochi's resort city are closed with clients predominantly from Moscow, St. Petersburg, and Siberia. In Krasnodar, this number fluctuates between 30-40%, with a drop in buyers from other cities and a growing interest in resort areas in the region.
Earlier, we reported that rental prices for studios in Krasnodar have dropped by 3.5%. Currently, the average rental price is set at 22,000 rubles.
Developers in the Kuban region are leveraging installment plans to offset the broader slump in the Russian housing market, where sales of mid-range and mass-market homes have nose-dived recently nationwide. Offering installments eases the financial burden for buyers, providing a viable option amid stricter lending conditions, higher interest rates, and a diminished appetite for risky investments.
Stalled construction and prolonged sales timelines have become common due to the Central Bank’s high key interest rates and cautious buyer behavior. Meanwhile, economic experts are warning of dwindling supply and soaring housing demands in coming years, particularly in thriving cities like Moscow and the Far East, which could eventually impact supply and demand dynamics in Krasnodar.
Despite this looming pressure, demand is shifting towards resort areas in Krasnodar, driven by lifestyle preferences and perhaps relative tourism stability in these zones. The allure of vacation homes, coupled with the quality of life considerations, makes resort areas more appealing to buyers.
While the data doesn’t explicitly tie the tourism resurgence post-Crimea annexation, it's plausible that resort demand in Krasnodar could benefit as tourists and property buyers look for home ports within Russia’s southern regions.
So, as the housing market struggles with sales slumps and interest rate hikes, developers and buyers alike are turning to innovative financing solutions like installment plans and tempting resort areas to keep the business afloat.
- In the Kuban region, developers are increasingly offering installment plans for resort real estate to buyers, as traditional mortgage market slumps by half compared to 2024.
- Over the past five years, there's been a significant increase in investors purchasing property, particularly in Sochi, with around 80% of primary market agreements being closed with clients primarily from Moscow, St. Petersburg, and Siberia.
- As a result of the Central Bank’s high key interest rates and cautious buyer behavior, stalled construction and extended sales timelines have become common, causing a national decline in sales of mid-range and mass-market homes.
- With stricter lending conditions, higher interest rates, and a diminished appetite for risky investments, developers are relying on installment plans as a financial relief option for buyers.
- Despite potential supply and demand challenges in the future due to dwindling supply and soaring housing demands in cities like Moscow and the Far East, there's a growing demand for residential real estate in resort areas of Krasnodar, driven by lifestyle preferences and tourism stability.
