How will Trump's victory affect the Russian real estate market?

Should we expect an increase in the cost of housing and commercial real estate? How will the new course of America affect Russia as a whole? Answers to these questions are given by ILM experts.

According to Alexander Gurganov, ILM Partner, “the main factors that will determine the dynamics of the commercial real estate market in Russia in the coming years: the level of business activity, the level of purchasing power of the population, the availability of affordable financing for development projects and the amount of vacant space that exists today. Most analysts agree that in the short term, Trump's election introduces an element of uncertainty, which means that the consequences are falling investments, falling oil prices, and the ruble weakening. Further, no one can say with certainty to what extent a number of his election statements will be brought to life. At the same time, we do not mean his most populist statements here.

According to analysts at Morgan Stanley, the likelihood of lifting the sanctions in 2017-2018. with Trump's win is about 35%. Of course, this is a positive signal, which affects both the business prospects of foreign companies and the prospects for foreign investment. Further, a radical new approach to the solution of the Syrian problem was heard from the mouth of the new president (support for Assad in the fight against LIH, refusal to support the “moderate opposition”). At the same time, everyone understands that in the absence of Trump’s experience in foreign policy matters, a lot will depend on the candidacy of the new secretary of state, the leadership and the position of the special services, and the willingness of the Senate and Congress to change something in this direction. The American ship turns extremely slowly and reluctantly. A serious negative signal for us is Trump's pre-election statements about increasing production and exporting shale oil, which, with his well-known skepticism and disregard for environmental issues, is quite possible. Trump made serious statements about protectionist measures in the field of international trade, focusing on issues of domestic policy and domestic economy, etc. You can continue to go deep into a multifactor analysis of the possible steps of the new administration, the personal characteristics of the new president and their impact on our lives, one thing is clear: no one can give an accurate forecast.

Ball is ruled by uncertainty. Nevertheless, the “Trump Effect” on our segments of commercial and residential real estate, I believe, is the place to be, and it is more likely of a subjective psychological nature that will last for the next six months - no more. Suffice it to say that the day of the American elections passed in our media space and social networks much more rapidly than our own elections of any level. And this revival is not over. "We are waiting for change" and yet "it has become more interesting to live." The breath of these changes came from overseas. From across the ocean came a reminder of the role of the individual in history. Considering the fact that our most influential media worked to create a positive image of Trump, most of our people, regardless of educational qualifications, perceive his victory as a hope for positive changes, including in our home. And if so, then in terms of real estate - “the bottom is passed, the worst is behind, the rise is ahead (when it is not clear, but it’s soon), you have to buy, while cheap, you need to rent, while cheap.” For those who still have the opportunity to do it, of course. We can expect a small surge of activity in the coming months, and what will happen next - real politics and economics will show. ”

According to Andrei Protasov, ILM Partner, “the state of relations with the United States and the sanctions directly affect the interest and ultimately the activity of foreign investors and tenants in the Russian Federation. If with Trump's victory the warming begins and the attitude to the Russian Federation in the world is normalized, it will have a positive impact on real estate in the best case in 1-2 years. Still, we should not forget that the main reasons for the lack of interest of foreign investors in Russian real estate are the presence of structural problems in the economy and the fundamental indicators of the real estate market (excess space, falling rental rates, weak demand). ”

According to the forecast of Yuri Yudakov, director of the department of corporate real estate solutions of ILM, “Trump’s victory in the elections should not affect commercial and residential real estate in Russia. In the next few months, the US policy towards Russia will not change much. Do not expect the lifting of sanctions, which were introduced a couple of years ago. In my opinion, the political and economic situation inside the country affects the commercial and residential real estate more. Much depends on the policy of the Ministry of Economic Development, the Central Bank, the laws that are passed by the State Duma deputies, and so on. Rising and falling prices and rates depend on supply and demand in the market. ”

According to Ekaterina Volkova, a leading analyst at ILM, “now on the market after a long decline, the phase of stagnation has come. The growth of rates may not begin until the end of 2017. However, the recovery will be uneven, the rates will be raised by those owners whose objects are located in the most popular locations. ”

Posted by www.cre.ru