Last year lodgings prices have been rising in the absolute majority of belarusian towns, while in the 1st quarter of this year the price trend changed its direction abruptly. In a number of cities these crisis consequences have been so noticeable, that the decline in real estate prices in the capital may even seem ordinary compared to them.
The beginning of 2015 was very difficult for the Belarusian housing market. According to the key indicator — the number of realty sales transactions – there has been an antirecord documented in the 1st quarter of this year. There hasn’t been such a low lodgings demand for the last 5 years.
Situation in Minsk and other Belarusian towns follows the same course. Over the first three months of this year customer spending has decreased by 15% on the average countrywide compared to that in 2014.
General statistics could have been even more depressing, had the dual currency exchange rate – with an “expensive” dollar in currency exchange offices and a “cheap” dollar exchange rate at the National bank – not been set in the beginning of January. A number of property developers continued selling apartments in newly-erected buildings at the official foreign exchange rate and, according to the official data, people in regions have taken the advantage of this opportunity actively.
In Minsk about a quarter of realty sales transactions in January was accounted for newly erected buildings, while in a number of regional centers this share reached half of the total volume of transactions. In Grodno and Brest in January 2/3 of realty sales transactions were accounted for newly erected buildings.
Regions have truly experienced the lack of demand in February, when sales declined twice in comparison with an average index of the last two years. In February only 450 realty sales transactions have been closed in regional centres (except for Minsk), while in 2014 this index varied from 700 to 1100 transactions per month.
In March there has been a little recovery in customer spending, and yet the amount of concluded realty sales transactions remained significantly lower than that in previous years.
In Vitebsk lodgings sellers felt the lack of demand more than in other regional centres, as in the first quarter of 2014 the amount of realty sales transactions there decreased by 37% compared to that in the previous year. In Mogilev this index was 16%, in Brest – 13%. In Grodno and in Gomel the number of transactions slightly differed from that in 2014: the decrease was only 9% and 4% respectively.
Among other Belarusian towns, Novopolotsk (53%), Orsha ( 41%) and Polotsk (-8%) have been most affected by the lack of demand. Vitebsk region was singled out in the review in 2014, as there has been an inadequate increase in prices without any accretion of demand.
In Vitebsk region consumer activity in the 1st quarter of 2015 compared to the number of inhabitants was twice lower than in Soligorsk and Baranovichy, where apartment sales didn’t fall to the level of 2014.
Real estate prices in Belarus have been changing only in one direction: in the 1st quarter of 2015 there’s been an impressive decrease in prices in all Belarusian towns ranging from 3% to 18%. It is noteworthy that Minsk, which has traditionally been a leader in all processes, has been in the middle of the list with the negative index -10% since the beginning of the year.
The maximum price-cutting among the regional centres is accounted for Brest, where average lodgings prices have decreased by 15% over the last three months based on the results of the concluded realty sales transactions. In Vitebsk and Mogilev the decline was almost the same (-13,5%). In Gomel the average lodgings prices decreased by 9%, in Grodno – 5,4%. Among other major towns the most serious reduction of prices was recorded in Mozyr (-8%), Polotsk (-16%) and Molodzyechno (-11%).
This trend is likely to continue in the 2nd quarter of the year. In towns where apartment prices were maximum at the end of 2014 the pace of decline may outrun that in the capital. In Minsk prices have been declining with a different pace for the last 18 months, while in regions there has been a noticeable decline in the last 3 months only. This tendency is likely to continue, unless there’s a recovery in customer activity in late spring – early summer.