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Cost reduction due to coronavirus is predicted to new buildings in Russia

Cost reduction due to coronavirus is predicted to new buildings in Russia
Experts estimate that the coronavirus crisis will greatly affect real estate prices in Russia. At the same time, the restoration of the industry may take four years. 

The agency "National Credit Ratings" (NKR) calculated the possible damage from the crisis caused by the coronavirus. Experts considered several scenarios for the development of the epidemic, according to the most unfavorable of them, quarantine will be canceled only in September 2020. 

According to agency data available TASS, the cost of apartments in new buildings may decrease by 20-30%. The demand for such transactions will remain low and may decrease by 25%. Due to these factors, the losses of developers can amount to about 200 billion rubles - more than 25% of the revenue of the 20 largest developers in 2019.

If quarantine is maintained only until May 2020, then demand will drop to 10% and may recover in the third quarter of 2020. Under this scenario, a tangible decline in real estate prices is not expected, and the developers' revenue will decrease by a maximum of 90 billion rubles.

At the same time, experts believe that critical losses among developers will not happen. Small construction companies may begin bankruptcy in the second half of 2020, if the unfavorable epidemiological situation persists. The remaining developers will be able to fully recover in two to four years.

Earlier, experts predicted price reduction per square meter in April 2020. The main factor affecting the cost of housing was the spread of coronavirus and a decrease in demand for real estate. 
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