Not so long ago, housing in old houses was not highly valued on the real estate market. Such apartments were mainly purchased by citizens with a small family budget. But now the situation looks different. Now many people want to buy an apartment in a building for renovation. What is renovation, what is this trend associated with, and how to purchase real estate in such houses? Answers to all questions in our article.
Houses for renovation in Moscow. Main risks.
One of the main risks is the lack of social infrastructure near new houses built for renovation. Agree, you are buying an apartment, but there is no school, clinic, kindergarten or basic social facilities near the apartment. And in the coming years, it is unknown whether the authorities are going to eliminate the lack of amenities in new residential areas. When purchasing apartments in a renovation building, first of all pay attention to:
- Availability of schools, kindergartens, shops
- Availability of medical facilities and leisure centers
- Transport interchange
- Availability of parking
- Ecological situation of the area
- Presence near noisy and hazardous industrial areas
The demand for apartments in houses for renovation directly depends on these factors.
What are the benefits of buying such real estate?
The term “renovation” is gaining more popularity every year. The renovation program is a program for resettling Russian citizens living in dilapidated low-rise housing. After people move from them, developers reconstruct or demolish the house and give an apartment in a new location (for example, the renovation in Shchukino showed this). This program simultaneously solves two problems: citizens receive improved living conditions, and the city acquires a modernized appearance .
Lists of addresses of demolished housing can be found on the Internet on many sites.
Pros of renovation
Advantages of buying an apartment in houses for renovation:
- Saving the family budget . Moscow Khrushchev apartments in a building undergoing renovation are much cheaper than apartments in renovated buildings. As a result, by purchasing real estate in an old house that will undergo renovation, a citizen will save a significant amount of money and receive new housing for which he previously did not have enough money.
- Getting spacious housing . Owners of cramped apartments in old five-story buildings are being rewarded with new spacious real estate. Thanks to this, it is possible to get good housing without seriously spending money.
- Obtaining housing with finishing work completed . As a rule, apartments in new buildings are sold without finishing. On average, repairs to such housing will cost a citizen 1,000,000 rubles. But apartments received under the renovation program are already furnished.
- Relocation to a good area . Houses under the renovation program are being built next to all the necessary social facilities. These include: a school, a kindergarten, a hospital, a clinic, a sports ground, etc. It is also planned to create a park, a pedestrian zone, and special places for active and relaxing recreation. By moving into an apartment under the renovation program, a citizen will receive not only comfortable housing, but also access to all of the above facilities.
Note! The new apartments received under the renovation program are the same in size as the old ones. But if a citizen wants to get larger housing, he can pay a certain amount of money.
Buy an apartment in a building for renovation
How to buy an apartment in a renovated building? The owners of such apartments are citizens who have entered into an exchange agreement on the transfer of ownership rights. They collect the necessary package of documents and after concluding the contract and registration, they can already move to a new apartment. After this, the owner has the right to dispose of the property at his own discretion, including selling it.
At this stage, housing in renovation buildings differs little in cost from standard apartments. If the seller’s documents are in order, you can safely conclude a deal with him and buy the desired property in a newly built high-quality house with subsequent re-registration to the new owner.
What risks do buyers of apartments in houses “under renovation” risk?
Novostroy.ru: What is the purpose of purchasing housing in renovation areas today? How do customers plan to use it?
Dmitry Zaslavsky, real estate specialist: Apartments in buildings included in the renovation program are currently purchased only for the purpose of investment. It is not profitable to buy such real estate only to satisfy the need for housing. Its prices are much higher, and the level of comfort is lower than in houses built in 1980-2000.
The method of use of the purchased apartment depends on the personal situation of the buyer. Those who have other housing plan to rent it out for the time being until eviction and demolition of the house. Those who no longer own real estate will live in it.
Elena Zemtsova, managing partner of Delta estate: Such apartments are mainly of interest to investors.
Despite the fact that such properties are often sold at an inflated price, the buyer has the opportunity to capitalize on the difference in cost by obtaining a larger area. For example, in old five-story buildings, the area of a typical one-room apartment is 30-35 square meters. m, which by modern apartment standards corresponds to the concept of “studio”. According to the renovation program, owners will receive, as an alternative, full-fledged one-room apartments of larger area, and, accordingly, higher in cost. Investment capitalization can reach 30-50%.
The second category of buyers of such real estate are those who purchase an apartment in an old building for personal residence with the prospect of getting square meters in a new house. The main goal of this category of buyers is to improve their living conditions. In the absence of funds for better quality housing, purchasing real estate in a building for demolition is a good opportunity to buy an apartment in a new building at the most affordable price.
Novostroy.ru: Are there any risks when purchasing secondary properties in renovation areas?
D.Z.: The risks of purchasing an apartment in a building “for renovation” should be divided into two types. The first type of risks is associated specifically with renovation. When will a house be built to relocate the residents of this particular five-story building? Where exactly will it be built, how close to the usual area? What quality will this new building be? That is, these are risks common to all residents of this “conditional house for renovation.”
The second category of risks is common for all purchased apartments. It is necessary to carefully check all the information on the apartment, the documents for it, and track all previous transfers of ownership and use rights. A competent real estate specialist can handle this task.
E.Z.: The main risks are associated, firstly, with the fact that the renovation program is at the initial stage of its development. There is still no clear plan for the demolition of dilapidated housing in all districts of Moscow, which means the exact timing of resettlement is unclear. Secondly, questions remain about the quality of housing provided under the program. New apartments may have reduced consumer characteristics: poor layouts, poor sound insulation and insolation, poor-quality finishing, and the houses themselves may be located in poor locations. So, for example, as an alternative to old housing in a location with developed infrastructure, they may offer an apartment in a less developed area or industrial zone, although the administrative territory will remain the same. Because of this, investors may have difficulty selling the resulting living space.
News on this topicFebruary 3, 2020
Officials of the Moscow regional government reported on the results of the program for relocating emergency housing in 2021. This work is being carried out within the framework of the national project “Housing and the Urban Environment”. According to the head of the Ministry of Construction of the Moscow Region, Vladimir Loktev, residents from 722 emergency premises were resettled, the total area of which was 28.8 thousand square meters. meters. Thus, 1,866 citizens who previously lived in unsuitable living conditions received new apartments from the regional authorities.
Almost two thousand people were resettled in the Moscow region in 2021. They promise to resettle even more this year.
Novostroy.ru: What parameters, in your opinion, are key when purchasing such real estate?
D.Z.: If we accept that apartments in houses for renovation are purchased only as an investment in a future new building, then it becomes clear that the key parameter is the price. This is what makes a future investment especially attractive. For 50-60-year-old houses, their technical condition is also important: if the communications throughout the house are in poor condition, then living becomes uncomfortable, and there will be few applicants for renting a home.
E.Z.: In most cases, buyers of such real estate do not plan to live in it, but are simply waiting for the house to be demolished. Therefore, neither the floor nor the condition of the apartment and the house itself are at all important to them. The key factors are the area, the cost of the property and the timing of demolition of the house. Among investors, the most common budget and “fast” options are one- and two-room apartments in areas either already affected by renovation, or those where it is just planned.
Novostroy.ru: How has the demand and cost of resales in renovation areas changed over the past two years?
D.Z.: In houses included in the renovation program, apartments are more expensive. For example, in the Belyaevo metro area there are five-story buildings whose residents refused to participate in the renovation program, and there are houses adjacent to them that are involved in this program. The difference in the price of apartments in these identical “panels” is, for one-room apartments, about 15-20%. This is the cost of the “investment attractiveness” of real estate in “houses for renovation”. People are willing to pay more, counting on a future move to a new building with a higher level of comfort. We can say this: according to buyers, the price of an apartment in a five-story building “for renovation” remains attractive as long as it is not more expensive than an economy-class apartment in the same area, in a building built in 1980-2000. Because the new buildings into which the residents of the demolished five-story buildings will move in are comparable precisely to such houses.
Over the course of two years, the demand curve looked something like this: first, around the fall of 2021, owners of apartments in five-story buildings sharply raised prices in anticipation of rush demand. But at these prices, the lots became uninteresting to investor buyers, and even more so to ordinary buyers. Subsequently, in 2021, the cost decreased to a mutually acceptable level, and continues to remain at the same level.
E.Z.: Over the past two years, the demand for real estate in houses for renovation has increased by approximately 1.5-2 times. Due to the increased interest in such properties from investors, apartments are mostly sold at prices above the market average. If we compare the situation with the growth in the cost of housing over the past year, then it is precisely the houses that fell under renovation that recorded the largest increase in the cost per square meter - up to 10%. In general, for other houses on the secondary market the growth does not exceed 5-6%. At the same time, the greatest increase in prices is observed in areas where active construction of new sites is already underway, and resettlement is planned in the near future. And also in areas where the housing stock mainly consists of five-story buildings.
Novostroy.ru: How, according to your estimates, will the demand and price for this real estate change in the coming years?
D.Z.: The demand for apartments in five-story buildings depends on investment attractiveness. If the overall risks of renovation, thanks to the actions of the authorities and the general economic situation in Moscow, are at a low level, then the current price ratio will remain. If information is disseminated among potential buyers about the unprofitability of purchasing apartments in renovated buildings, then demand will decrease, followed by the price. Another consideration: if citizens have a different investment instrument to increase their savings, then part of the money will “flow over” to testing a new method of investment. And then prices for apartments for renovation will decrease.
E.Z.: In order for the demand for such housing to remain high, it is necessary to minimize risks. And to do this, it is necessary to clearly regulate the procedure for providing alternatives to owners and develop a plan for the resettlement of five-story buildings with precise deadlines. In this case, demand will remain stable and move following the areas where renovation is in an active stage. Prices will most likely also remain either at the average market level or slightly higher.
News on this topic27 January 2020
And this will be the peak mark for the commissioning of new buildings for the entire program. Starting from 2021, houses will be designed in the liberated territories, this will launch the second wave of renovation. Andrey Bochkarev, the new deputy mayor of Moscow for urban planning policy and construction, said today.
3.5 million “square meters” of renovation housing per year will begin to be commissioned in 2022
Houses built under the renovation program
Comfortable renovation houses in which Muscovites plan to buy apartments undoubtedly differ in the quality of construction and finishing. They are under the control of the Moscow government. In total, more than 5 thousand such houses were included in the renovation program. Basically, program participants will receive new apartments in their districts and districts. Renovation at this stage is taking place in all districts of the capital. In recent months, Muscovites have grown in confidence in the resettlement program. The ongoing renovation has given people confidence in the possibility of replacing dilapidated housing with new and comfortable ones.
The demand for apartments in buildings that are subject to demolition has also increased. Thus, “Khrushchev” apartments have risen in price by 25% over the past year. Although such an acquisition can be called a risky investment. Not many people would like to move from a renovated apartment with a green courtyard to the upper floors of skyscrapers on a busy highway.
Houses for renovation at address
On the official website of the Moscow Mayor and other information portals, at any time you can find the addresses of residential premises under the renovation program. To find out which houses are undergoing renovation at an address in Moscow, you need to go to the official websites of the Government and the Mayor of the city and look at the map on which houses are marked for demolition. How to find out the deadline for demolishing a house for renovation and whether your apartment is subject to the state relocation program can also be found on the official websites of the Moscow Government.
New technologies called “smart demolition” will allow demolition of buildings in a modern way. They will be gradually dismantled and subject to future recycling. Thanks to government programs, the appearance of the capital will change, and the quality of life of citizens will improve significantly.
Renovation: more about the essence of the program
The Moscow renovation program first appeared in the 1990s, when the mayor of the capital, Yuri Luzhkov, selected five-story buildings of certain categories (K-7, II-32, II-35, etc.) for demolition. At that time, the authorities were unable to fully implement the project, which was partly due to a lack of money in the state budget. The current mayor of Moscow, Sergei Sobyanin, proposed resuming the program to renew the housing stock in 2021.
Capital renovation refers to a set of actions aimed at demolishing old residential buildings (usually five-story “Khrushchev” buildings). The permissible lifespan of the Khrushchev buildings has either already expired or will end in the very near future. The main task of the renovation is to prevent five-story buildings from turning into unsafe and uninhabitable structures that will pose a danger to Muscovites.
The authorities decided to take the path of demolition of houses, and not along the path of their reconstruction and repair (with the exception of objects representing valuable cultural heritage). This is due to the fact that demolishing the Khrushchev buildings is both more profitable and safer for people.
Citizens living in demolition houses have the opportunity to move to modern and comfortable new buildings. Here they are provided with apartments of equal size, but improved in their technical characteristics. In some ways, the relocated residents will even benefit. The number of rooms will remain the same in the new and old housing options, but the hallway, kitchen and bathroom will definitely become more spacious.
If a person has the financial opportunity, he can pay extra for the “extra” meters and increase his home even more. At the same time, there will be no need to move far from your usual place of life, because the new buildings will be located in the same places as the demolished houses.
If the current owner does not want to receive housing in a new building, he can receive monetary compensation . The amount of monetary compensation corresponds to the market value of the original apartment.
Who builds houses for renovation
For new residents planning to move from a cramped apartment to a spacious and new one, it is important to know who is building renovation houses in Moscow?
The competition was won, which will act as a contractor. Also, active participation is given to design organizations. Also, the state-owned enterprise “Civil Construction Administration”, which commissioned the largest number of meters in operation in Moscow, will be engaged in the construction of houses for renovation.
Where will the renovation houses be built?
Where will the renovation houses be built and how will we find out the location of the future apartments for the capital’s resettlers? New buildings began to appear in seven districts of Moscow. Their total area will be about 100 thousand square meters. meters. An official representative of the capital's construction department reported this on his website.
This is the area of Mozhaisk, Tsaritsina, as well as on the streets of Baumanskaya, Staroalekseevskaya, Black Lake, Kerchenskaya, Kakhovka, Kaskadnaya Molodtsova and Kronstadt Boulevard. And this is not a complete list of houses for renovation in Moscow.
