Skyrocketing costs, diminishing space, and the inclination towards modular construction in the real estate sector
Rural Real Estate: A Game Changer in Post-Pandemic Times
Post-COVID-19, rural real estate has erupted as a sought-after niche, with home prices skyrocketing an astounding 83% in just five years. This burgeoning market, once a quiet corner of the property world, has now shed its sleepy image and undergone a radical transformation. At the "XXI Real Estate Day" conference in Yekaterinburg, Eduard Bogdanov, Vice President of the Ural Real Estate Chamber, delved into the new trends unfolding in this vibrant market.
A Shifting Market Landscape
In the past year alone, the demand for modest rural homes has plummeted by 80% in the "economy" segment and 60% in the "comfort" segment. The culprit? Stricter legislation, slated to take effect in 2025, stipulating that residential buildings on garden plots must be registered with Rosreestr and taxed. Furthermore, since March 1st, a mandatory escrow account mechanism has been implemented for private house construction.
"These legislative changes have brought the rural real estate market to a grinding halt," observed Eduard Bogdanov. "As developers factor in these additional risks, home prices continue to escalate." He added that the hefty 21% interest rate and the termination of subsidized mortgages last year have also contributed to the decline in demand.
While home prices have soared, the cost of land plots has increased by approximately 71%. However, location plays a crucial role in these price changes. In the 'Golden Carp - 2' cottage village, prices have fluctuated fivefold. At the start, plots sold for 200,000 rubles per 100 sq.m, and now they reach 1 million rubles per hectare.
Forecasting the Future of Rural Real Estate
Despite these meteoric rises, Eduard Bogdanov predicts that rural real estate prices will not continue to escalate at the same breakneck pace as they have in the last two years. " prices will rise, but at a more moderate pace," he opined. He reasons that the more gradual growth in the cost of building materials will make planning construction less daunting.
Evolving Preferences Among Buyers
The preferences of rural property buyers have shifted dramatically over the years. Today, buyers are increasingly drawn to compact, practical homes that marry comfort with convenience. "While almost no one wanted homes smaller than 100 sq.m a decade ago, this figure now stands at 40%. The market's current darling is homes ranging from 100-150 sq.m," noted Eduard Bogdanov.
Notably, families are keen on single-story houses, with two-storey mansions accounting for just 30% of transactions. When building houses, buyers meticulously consider their layouts to avoid unnecessary square footage. The ideal contemporary country home boasts simple architecture, wide panoramic windows, abundant natural light, and a terrace.
A new and promising demographic constitutes 15% of rural home buyers - individuals under the age of 35. Surprisingly, these young buyers enter the market with a clear idea of what they want in their countryside retreat and why they choose to relocate.
The Rise of Modular Construction
Prefabrication technologies are gaining momentum in individual construction. This approach, involving the assembly of factory-produced modules, allows builders to save money and time. "By laying the engineering networks, pouring the foundation, and assembling the prefabricated modules on-site, a ready-made house can be completed in just 5-7 days," explained Eduard Bogdanov.
As demand for quality builders grows, buyers are becoming more discerning in their choices. Contractors are now expected to present portfolios, allow site visits, and yield testimonials from satisfied clients before signing agreements.
In summary, buyers prioritize safety and infrastructure above all else. Currently, the preference lies with gated communities that offer internal management, children's and sports facilities, and CCTV surveillance. While gated communities come with additional fees, they serve the same purpose as urban apartment communal charges. With the recent surge in the construction of cottage villages, there remains a dearth of developers capable of delivering compelling projects.
Yekaterinburg, Valentina Yaroslavtseva
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- Given the recent trends in the rural real estate market, individuals who are interested in finance and investing may find opportunities in the slowing growth of rural real estate prices, as predicted by Eduard Bogdanov.
- As the housing-market landscape evolves, real-estate investors might consider modular construction for its efficiency and cost-effectiveness, especially with the increasing popularity of this approach among buyers seeking quality builders.
