Investing in housing no longer a good idea, FINAM claims

‘Housing prices no longer tend to go up, and we believe they will stay relatively stable throughout this year, even though the trend might change later. In our opinion, however, there are no fundamental price growth-boosting factors at play at the moment,’ says Maxim Klyagin, an analyst from FINAM Investment Company.

Meanwhile, OOO Fin-Invest-Stroi, the developer of Admiralskiy housing complex in Yekaterinburg, invited investors to give their money to this project instead of opening bank deposits or heading for the stock market as the latter do not look very appealing at the moment. The company offers apartments for 65,000 RUR per sq m and claims that the investors might make 15% to 20% annual profit when selling the apartment a few years later. Incidentally, an investor must pay for the apartment in full right away.

‘I don’t think this profit cab be obtained solely through the difference in price between new and existing homes. What is more, this particular housing complex belongs to the high-price category, which in combination with the current low demand makes the liquidity of such investments dubious. It will probably be quite difficult to sell an apartment worth 9 to 11 million RUR quickly. So, if anything, this can only be a rather long-term investment,’ FINAM’s expert notes.

‘As a matter of fact, the stock market keeps going up, while the real estate market still retains certain pricing risks. So in terms of profit-making, investing in real estate looks less appealing at the moment. At the same time, as the housing shortage comes to be felt more keenly (since housing construction is on the decrease), the situation will gradually change,’ Klyagin reports.