In the best-case scenario, the residential market will regain its health at the end of 2009-early 2010, after last year when the house prices plummeted 30% from a year earlier, reads the latest report of CBRE|Eurisko real estate advisor.
CBRE|Eurisko representatives say it is unlikely for any developer to deliver major residential projects this year as the market will settle down and projects under construction will be completed.
In 2008, the house prices fell by 30% compared to a year earlier, given the location, finishing and facilities on the table or the marketing strategy of the developer. The number of housing units purchased by investment funds slumped below 10% in 2008 from 40% in 2007.
As for the end buyers, many bookings and pre-agreements have been undone as the buyers’ credit scores were no longer eligible for a mortgage loan.
“These housing units will probably remain in the rental market in 2009. Several developers aborted the construction works for residential compounds, saying they would return the downpayments to the clients”, said the representatives of CBRE|Eurisko.
In the coming period, they say, the unjustified high prices will fall while buyers will shift their focus away from luxury apartments, and will be looking more for affordable houses. Thus, developers will have to find solutions to stimulate sales, such as discounts for one or two free parking spaces, storage space in the basement, kitchen furniture and or even discounts of the end price, if the buyer pays a 20-30% downpayment or if a client wants to buy more than one housing units.
Other developers choose to sell the houses without finishing, or to reduce the comfort standards, such as replacing the individual heating installation with district heating plants, in order to offer a lower price.
In 2008, the most popular apartments in the rental mar
