Real estate market

A market economy is based on the right of private property - the right to own, use and dispose of property. This allows citizens or private enterprises, at their own discretion, to acquire, use and sell material resources and enter into contracts that are legally binding and binding on partners.

Property ownerhas the right of testament, i.e. the right to appoint a successor to this property after his death, which significantly supports the institution of private property. It should be noted that under the market model there is also state ownership, as well as ownership in mixed forms. Naturally, legislation should provide for legal restrictions on private property rights related to the interests of society as a whole.

Freedom of enterprise and choice is directly related to private property. Freedom of entrepreneurship allows you to organize the production process from available resources and sell the produced goods (products, services) on the market at your own discretion. The decision to enter or exit a particular market (type of activity) is in the hands of the entrepreneur.

Freedom of consumer choice, i.e. The freedom of the consumer, within the limits of his income, to purchase goods and services in the set most suitable to meet his needs is dominant among other freedoms and determines the limits of freedom of choice of suppliers of material and human resources. The end result is that the consumer decides what the economy should produce.

Self-interest shapes the course of action of various subjects of the real estate market when they exercise their free choice. Each of them strives to do what is economically beneficial for them. Thus, property owners strive to get the maximum price when selling or renting it out, tenants try to extract maximum profit from the use of rented space. Stimulating personal interest is one of the characteristic features of a market economy and largely gives it direction and order in its functioning. Freedom of choice, which is realized for each market participant in the form of the desire to receive personal monetary income, serves as the basis for economic competition, or competition.

Competition in the real estate market involves:

· the presence in the market of a large number of independently operating sellers and buyers of specific goods, products, resources and services;

· freedom for sellers and buyers to enter certain markets and leave them at their own discretion.

However, the essence of competition lies in the fact that there is such a large number of sellers in the real estate market that each of them, providing a small share of the total supply, is practically unable to influence the price of the product. The same ratio is also true for those who act in the real estate market as a demand provider. There are many buyers and a single buyer cannot control the market to his benefit. Competition sets the limits for sellers and buyers of real estate to realize their personal interests.

The most common form of competition is price reduction. It lies in the fact that real estate sellers, trying to increase (accelerate) the number of sales, offer it at lower prices than competitors. To do this, each seller must do everything in such a way as to sell at the same prices as the competitor, or cheaper. An entrepreneur who does not have sufficient skill in this regard will have to leave the real estate market sooner or later. On the contrary, a skillful entrepreneur receives high profits, which allows him to develop the business.

One of the ways to compete is through innovations designed to attract buyers. During the relatively short period of formation of the real estate market in Russia, this was very clearly manifested in the activities of realtors.

In addition to direct competition, entrepreneurs operating in the real estate market also find themselves drawn into indirect competition. This is competition between various sectors of the economy and various groups of goods and services. For example, people who were planning to buy an apartment may change their mind and buy a car or go on an expensive trip, brick houses may displace wooden buildings, retail trade has an advantage in obtaining a bank loan, as opposed to transactions with land plots.

Real estate market - it is an interconnected system of market mechanisms that ensure the creation, transfer, operation and financing of real estate.

The real estate market is a collection of regional, local markets that differ significantly from each other in price levels, risk levels, efficiency of real estate investments, etc.

The real estate market is an essential component in any national economy, because... real estate is the most important component of national wealth, accounting for more than 50% of the world's wealth. Without a real estate market there cannot be a market at all, because... labor market, capital market, goods and services market, etc. for their existence they must have or rent the premises they need for their activities.

Real estate is at the center of the combination of economic processes, private and public interests, administrative norms and rules (Fig. 9.1).

Figure 9.1 - Real estate - an object of economic and state interests

Real estate as a commodity is an object of transactions that satisfies various, real or potential needs and has certain qualitative and quantitative characteristics. WITH The essence of real estate as a product is as follows:

Physical content of the property (physical characteristics describing the area, volume, construction materials, power of engineering systems, etc.);

Legal characteristics (the rights to the property, and not the property itself, participate in market turnover);

Economic characteristics that give an idea of ​​the value of the object (market, replacement, replacement, etc.);

Costs of its maintenance (current and major repairs, water, gas, electricity, etc.); and profitability (rent and indirect income, increase in value, etc.).

The Russian real estate market reflects all the problems of a transition economy and is characterized by uneven development of its segments, an imperfect legislative framework and low investment activity of citizens and legal entities. The following stages can be distinguished in the development of the real estate market in Russia:

1. The real estate market experienced its most rapid period of development in the early 90s. The opening and development of enterprises took place practically in a legal vacuum; demand far outstripped supply. The starting point here can be considered the permission to privatize apartments and, as a result, the opportunity to sell and buy apartments. It was then that a significant number of businessmen and simply wealthy people appeared who wanted to improve their living conditions in a new way. That is, not by waiting for free municipal housing, not by complex exchange schemes, but simply by buying apartments. At that time, relatively few apartments were privatized, there were few apartments selling, and there were already enough buyers.

2. At the second stage, the first regulations governing real estate activities in Russia appear. This period is characterized by the provision of significant benefits, which, while maintaining good market conditions, made it possible to receive good incomes, which attracted new entrepreneurs to this market segment. Housing prices began to rise, but apartments became much more difficult to sell, and buyers became more picky. New forms of customer service have emerged. In particular, the sale of apartments with installment payments and the provision of loans secured by apartments appeared and became widespread. Some companies began to work under exclusive contracts, undertaking an obligation to sell the client’s apartment within a certain period of time.

3. The third stage is characterized by an excess of demand over supply, a tightening of the legislative framework, and intense competition in the market, which led to a drop in income. Small enterprises are going bankrupt, medium-sized and even large enterprises are struggling for survival. By the beginning of 1996, a natural decline in apartment prices began.

4. From the second half of 1999, a new stage in the development of the Russian real estate market began after the August 1998 crisis - the stage of stopping the decline in prices, the beginning of stabilization and some recovery. This occurred against the backdrop of favorable development of macroeconomic indicators in the country and, in particular, low (compared to the fall of 1998) inflation rates and a smooth and limited devaluation of the ruble against the dollar.

Consequently, the real estate market, as follows from the theory of a market economy, has passed the stage of decline, reached stabilization, and ahead (not necessarily immediately) is a new rise, including some price increases.

Through the market mechanism and government regulation the real estate market provides:

1. creation of new real estate objects;

2. transfer of rights to real estate;

3. establishing equilibrium prices for real estate;

4. operation (management) of the property;

5. allocation of space between competing land uses;

6. investing in real estate, while performing the following operations carried out with real estate:

6.1. with change of owner:

Purchase and sale of real estate;

Inheritance;

Donation;

Ensuring the fulfillment of obligations (for example, the sale of mortgaged or seized real estate);

6.2. with partial or complete change in the composition of owners:

Privatization;

Nationalization;

Changes in the composition of owners, including the division of property;

Contribution to the authorized capital;

Bankruptcy (liquidation) of business entities (with the satisfaction of creditors' claims, including through the sale of property of the owners);

6.3. without change of ownership:

Real estate investing;

Real estate development (expansion, new construction, reconstruction);

Changes in the direction of use, brand name, legal address, etc.;

Management, operation;

Transfer to economic management or operational management, for free use;

Regularly received income from owning real estate, which does not require the recipient to engage in entrepreneurial activity;

Rent (one party (rent recipient) transfers ownership of property to the other party (rent payer), and the rent payer undertakes, in exchange for the received property, to periodically pay rent to the recipient in the form of a certain amount of money or the provision of funds for its maintenance in another form);

Lifetime maintenance with dependents;

Transfer to trust management;

Introduction (removal) of easements and other encumbrances;

Insurance of various forms and various operations, including real estate development lending.

All these operations in a market economy are carried out using market mechanisms, and therefore they constitute the real estate market.

Table 9.1 - Features of the real estate market

Sign	Characteristic
Localization	- absolute immobility - high dependence of price on location
Type of competition	- imperfect, oligopoly - small number of buyers and sellers - uniqueness of each object - control over prices is limited - entry into the market requires significant capital
Elasticity of supply*	- low, with an increase in demand and prices, supply increases little - demand can be very variable
Degree of openness	- transactions are private in nature - public information is often incomplete and inaccurate
Product competitiveness	- is largely determined by the surrounding external environment, the influence of the neighborhood - the specificity of individual preferences of buyers
Zoning conditions	- regulated by civil and land legislation, taking into account water, forestry, environmental and other special laws - greater interdependence of private and other forms of property
Registration of transactions	legal difficulties, restrictions and conditions
Price	includes the cost of the object and related rights

* Demand for real estate is individualized and not interchangeable, which makes it difficult to achieve market balance and proportionality. The amount of demand as well as supply for real estate is largely determined by geographical (location of the object in the city, region) and historical (houses of different periods of construction) factors; the state of infrastructure in the area of ​​the property (availability of access roads, roads, metro and other types of transport routes, trade and consumer services enterprises, parks, other places of public recreation, etc.). A number of factors influence supply and demand in the real estate market. The most important of them are given in table. 9.2.

Figure 9.2 - Cyclical development of the real estate market

1 - a decline in the real estate market is observed when there is a glut of constructed buildings, when the number of unoccupied buildings rapidly increases and it is difficult for the owner of a property to sell it, prices decrease. This is a buyer's market; 2 - absorption of created real estate objects occurs after an increase in demand for constructed objects and is characterized by a virtual absence of supply of new objects. This cycle is determined by the growth of pre-investment research for the creation of new real estate; 3 - new construction reaches its climax as a result of increased demand for newly created objects and is characterized by rising prices for construction projects. This is a seller's market; 4 - saturation of the real estate market occurs when there is an excess of construction capacity and overproduction of construction products, and construction activity is reduced. The growth of real estate sales during this period is reduced.

Table 9.2 - System of factors influencing supply and demand

Factors	Impact on supply	Impact on demand
Economic
Changes in the level of income of the population: growth reduction	In modern conditions, it is a factor in increasing supply in the finished housing market	Increase Decrease
Changes in business income levels: growth reduction	Increasing supply in the commercial real estate market	Increase Decrease
Availability of financial, in particular credit, resources: growth, reduction	Increase Decrease	Increase Decrease
Rent rates: growth reduction	Increase Decrease	Decrease Increase
Construction costs: increase reduction	Decrease Increase	Increase in the finished housing market
Tariffs for utilities and payments for resources: increase decrease	Increase	Increase
Social
Population change: growth reduction	Increase	Increase Decrease
Change in educational level: increase decrease		Increase Decrease
Change in crime rate: increase, decrease		Decrease Increase
Administrative
Property tax level: increase, decrease	Increase	Decrease
Land tax level: increase, decrease	Increase	Increase
Conditions for obtaining development rights: liberal restrictive	Increase Decrease

The real estate market has a branched structure and can be differentiated according to various criteria presented in table. 9.3.

Table 9.3 - Classification of real estate markets

Classification sign	Types of markets
Object type	-Land, buildings, structures, enterprises, premises, perennial plantings, property rights, other objects
Geographical (territorial)	Local, city, regional, national, global
Functional purpose	Industrial premises, residential, non-industrial buildings and premises
Degree of readiness for operation	Existing facilities, unfinished construction, new construction
Type of participants	Individual sellers and buyers, intermediate sellers, municipalities, commercial organizations
Type of transactions	Purchase and sale, lease, mortgage, property rights
Industry affiliation	Industrial facilities, agricultural facilities, public buildings, others
Type of ownership	State and municipal facilities, private
Transaction method	Primary and secondary, organized and unorganized, exchange and over-the-counter, traditional and computerized

Functions of the real estate market

One of the main functions of the market is establishment of equilibrium prices, in which effective demand corresponds to the volume of supply. When prices are below the equilibrium price, there is excess demand, and when the price is above the equilibrium price, there is excess supply. The price also contains a large amount of information about market saturation, buyer preferences, construction costs, economic and social policy of the state in the area, for example, housing construction, etc.

Regulatory function is that the market, functioning autonomously, according to A. Smith’s definition, “with an invisible hand” redistributes resources across areas of entrepreneurship and directs its participants towards a goal that was not at all part of their intentions - to form an effective structure of the economy and satisfy public interests . In the modern world, the shortcomings of market regulation are increasingly compensated by state management of the national economy, especially in terms of environmental protection, competition protection, income redistribution, creating a legal environment for business, solving social problems, etc.

Commercial function consists of realizing the value and use value of real estate and making a profit on the invested capital.

Sanitation function- this is the cleansing of the economy from uncompetitive and weak market participants, the bankruptcy of the ineffective. The market mechanism points people in the direction of their search, but does not give them any guarantees regarding the final financial results. It recognizes only socially necessary investments in real estate, because only those are paid for by the buyer. Therefore, freeing the market from inefficient owners of businesses and other real estate leads to increased sustainability and economic growth.

Information function is a unique market method of quickly collecting and distributing generalized objective information, allowing sellers and buyers of real estate to freely and knowledgeably make decisions in their own interests.

Intermediary function is expressed in the fact that the market acts as a collective intermediary and a meeting place for many independent and economically isolated buyers and sellers, a connection is established between them and the opportunity for an alternative choice of partners is provided. There are also professional intermediaries operating in the real estate market: realtors, appraisers, agents, brokers, insurers, mortgage lenders and other persons who provide services to interested participants.

Stimulating function acts in the form of economic incentives with profits for the productive use of scientific and technological progress in the creation and use of real estate. Competition economically forces and supports high business activity and the search for new opportunities for effective management of capital property.

Investment function- The real estate market is an attractive way to preserve and increase the value of capital. It promotes the transfer of savings and accumulation of the population from the passive form of reserves into real productive capital, which generates income for the owner of real estate. At the same time, the real estate itself serves as a kind of insurance guarantee for investment risks.

Social function is manifested in an increase in labor activity of the entire population, in an increase in the intensity of work of citizens striving to become owners of apartments, land plots and other capital and prestigious objects.

Basic real estate market management goals:

Implementation of the constitutional rights of citizens to real estate and responsibilities associated with its ownership;

Establishment of a certain order and conditions for work in the market for all its participants;

Protecting participants from dishonesty, fraud and criminal organizations and individuals;

Ensuring free pricing of real estate in accordance with supply and demand;

Creating conditions for investment that stimulate entrepreneurial activity in the production sector;

Improving the ecological environment, achieving economic growth, reducing unemployment, solving the housing problem and other public goals;

Fair taxation of real estate and real estate market participants;

Creating favorable conditions for solving the housing problem in the country and regions.

The real estate market has a branched structure, and it can be differentiated according to various criteria: type of financial asset, geographical factor, functional purpose and other indicators (Table 4.2).

Primary market in Russia is formed through newly constructed facilities and the privatization of state and municipal enterprises, land plots, buildings and premises and property rights. It ensures the transfer of real estate into economic circulation. All subsequent transactions are secondary nature, as they are associated with resale or other forms of transfer of objects placed on the market from one owner to another.

Organized market- this is the economic turnover of real estate and rights to it in strict accordance with current legislation with the participation of licensed professional intermediaries. This market guarantees the legal purity of transactions and the protection of the rights of their participants. Disorganized The (street) market does not always ensure the reliability of transactions.

The exchange market is the purchase and sale of objects on a real estate exchange, at competitions and auctions held by state and municipal property funds, land authorities, municipal housing committees or specially authorized organizations.

The over-the-counter market is the making of transactions outside the exchange. It can be organized or unorganized. The organized over-the-counter market is based primarily on computer communication systems of licensed real estate agencies.

Table 4.2. Classification of real estate markets by facet method

No.	Classification sign	Types of real estate markets
	Type of object (product)	1. Land. 2. Buildings. 3. Facilities. 4. Enterprises. 5. Premises. 6. Property rights. 7. Other objects
	Geographical (territorial) factor	1. Local. 2. Urban. 3. Regional. 4. National. 5. World
	Functional purpose	1. Industrial buildings. 2. Housing. 3. Non-industrial buildings and premises (offices, warehouses, etc.)
	Degree of readiness for operation	1. Existing facilities (old stock). 2. Unfinished construction. 3. New construction
	Type of participants	1. Individual sellers and buyers. 2. Intermediate sellers. 3. Municipalities. 4. Commercial organizations
	Type of transactions	1. Purchases and sales. 2. Leases 3. Mortgages. 4. Property rights (lease, pledge, etc.)
	Industry affiliation	1. Industrial facilities. 2. Agricultural facilities. 3. Public buildings. 4. Others
	Type of ownership	1. State and municipal facilities. 2. Private facilities
	Transaction method	1. Primary and secondary. 2. Organized and unorganized. 3. Exchange and over-the-counter. 4. Traditional and computerized

Based on the main characteristic - the type of real estate - at least eight specific markets are distinguished (see Table 4.2), among which the most developed markets for land plots, residential and non-residential premises are of universal importance. Since land is included as a necessary component in almost any real estate property, let’s take a closer look at the structure of the land market, its segmentation and main parameters.

Land market As a complex independent type of the real estate market, it is customary to divide it into relatively homogeneous subtypes or varieties according to the intended purpose of land, which are then differentiated according to a number of other characteristics (size, location, etc.) (Diagram 4.8).

The next component of the land market is a market segment - a specially selected part of a given type of it, a group of elements that have certain common characteristics (land quality, distance from industrial centers, etc.).

The most profitable market segment is characterized by:

• o high level of current or expected sales;
• o high growth rates of plot sales;
• o fast turnover of funds and an acceptable rate of profit. Market segmentation is one of the most important marketing tools. Success in competition largely depends on the correct choice of market segment.

There are a number of criteria and characteristics by which the land market can be segmented.

The objects of segmentation are buyers, the product itself, land, and market participants - commercial organizations and entrepreneurs.

A sign of segmentation is a factor by which market segments are identified.

Depending on the goals of segmentation, factors characterizing the purchasing behavior of individuals and legal entities, parameters of land plots, and economic indicators of commercial organizations can be used as features. Currently, real estate firms use multiple segmentation, i.e. segmentation based on several characteristics simultaneously (multifactor segmentation model).

Scheme 4.8.

and in a certain combination with others, in order to more accurately determine whose and what needs this or that type of land plot satisfies (Diagram 4.9).

Segmentation criterion- this is a factor by which the validity of the choice of a particular market segment is assessed. The most common criteria are: quantitative parameters of the segment, materiality, profitability, compatibility of the segment with the market of the main competitors, efficiency of work on the selected segment, protection of the selected segment from competitors.

Market segmentation by product- on the ground - allows you to identify exactly what parameters of a particular site may be attractive to buyers. In this case, such characteristics of land as their quality, distance from industrial centers (in Moscow - from the Moscow Ring Road), size of plots, investment attractiveness, prestige, etc. are used.

Thus, in the Moscow region, a number of segments began to stand out on the land market depending on the level of quality.

Scheme 4.9.

• 1. High quality plots - elite. They are purchased by wealthy citizens and large organizations. This includes lands of prestigious western destinations within a 30-kilometer zone. Comfortable cottages for permanent residence are most often built on such sites.
• 2. Average quality plots are of interest to people with average and relatively high incomes. Their distance from the Moscow Ring Road varies from 10 to 60 km; more modest country houses are built on such sites.
• 3. Low quality lands purchased by people with low incomes but at relatively cheap prices. In this segment, ecology, infrastructure and prestige lose their impact on buyer behavior. This category of land is located in almost all directions at a distance of over 50 km from Moscow (Table 4.3).

The eastern and south-eastern regions of Moscow are not prestigious and environmentally unfavorable, and near the Moscow Ring Road - Kosino, Zhulebino, located near pollution centers such as industrial zones (for example, Kapotnya).

Great differentiation of the land market is also observed in terms of prestige. Ecologically beautiful lands are located in the southwest and west of the Moscow region, for example, the banks of the Pakhra River, along the Rublevo-Uspenskoye Highway, etc. The Kazan direction is unpopular. The lands of the southern and eastern directions are considered unprestigious and unattractive.

The pattern of influence of the distance of sites from the Moscow Ring Road on their prices is generally expressed by the following dependence - the further away, the cheaper.

Next sign of segmentation- sizes of plots. Large plots are usually in demand and, accordingly, are valued higher only in prestigious areas. In general, the price per unit of land in large tracts is much lower than in small plots. At the same time, the cost of one hundred square meters on small and large plots can vary significantly depending on a number of factors.

The degree of infrastructure development has a great influence on the cost. Plots on well-developed land allotments are valued significantly more than those on undeveloped ones. The difference between the prices of developed and undeveloped plots with equal sizes will be approximately equal to the total cost of infrastructure development and capital management costs (the “cost of time” for developing a plot).

Table 4.3. Segmentation of the land market in the Moscow region

Signs	Market segments
1. Land quality	o Elite plots for cottage construction o Average quality plots for country houses for seasonal living o Low quality plots for garden summer houses
2. Distance from MKAD	o Up to 25 km; 25-50 km; 50-100 km; over 100 km o In Moscow - within the Garden Ring and beyond the Garden Ring
3. Location	o Prestigious areas: Minskoye, Rublevo-Uspenskoye, Riga directions o Ecologically unfavorable: southern and eastern directions
4. Size of plots	o Small plots: 0.06-0.2 ha o Medium: 0.25-0.50 ha o Large: over 0.5 and up to 15 hectares, and in remote areas - from 10 to 50 hectares
5. Purpose	o For residential buildings o For administrative and production purposes o Garden plots, etc.
6. Type of property rights	o Full ownership o Right to rent and use o Right to land shares
7. Investment motivation	o Areas requiring little management, but with a large increase in value o Areas with high cash flow and management
	o Elite category of new owners o Middle class of buyers o Consumers with low incomes
9. Buyer Behavior	o Attitude to the land and nature for growing products: recreation; entrepreneurship, etc.

Increase in the cost of a land plot depending on the availability of communications, %:

The choice of market niche also plays an important role, i.e. a small part of it that is not occupied or underused by competitors and a clearly defined circle of buyers.

Housing market segmented by the quality of houses (5-story - panel, brick, block; mass buildings - 9-, 12-, 16-, 22-story, mostly panel; prestigious modern brick and luxury), by the number of rooms (1-, 2 - and 3-room, multi-room apartments), by layout (standard, improved layout), by area of ​​accommodation (country cottages, houses, etc.).

The housing stock makes up more than 20% of the reproducible real estate in Russia, and taking into account residential buildings on garden and dacha plots - about 30%. The volume of investment in housing construction is approximately a quarter of its total volume; about 13% of the working population is employed in the construction and operation of housing. Almost 10 million families and individuals live in communal apartments, dormitories, or rent space from private individuals, over 2 million people live in dilapidated and dilapidated houses, 5-6 million families are on the waiting list for improved housing conditions, millions of people live crampedly - on area 5 m2 per person. But only 1.5-2% of those in need of improved housing conditions can pay the cost of an apartment or house at a time. According to experts, the cost of housing should not exceed 12-15% of the annual income of an average-income family. If such a family uses a third of their income to repay a bank loan with interest, then buying out the apartment will take more than 30 years.

The number of residential premises is characterized by 20-30 indicators, including the size of the kitchen, the presence of a balcony or loggia, the layout of rooms, bathrooms, views from windows, etc. Luxury housing in Moscow refers to apartments located in buildings that meet the following requirements. They must be built (or reconstructed) relatively recently (no more than 15 years ago) and located in the Center or an ecologically clean area adjacent to the Center, or even in a remote area (sometimes outside the Moscow Ring Road), but it must be possible quickly get to the Center. It is mandatory to have a concierge or security guard in the house, and, ideally, security of the surrounding area. The work of the services responsible for the maintenance and maintenance of order in the building must be carried out at a high level; It is also desirable to have an autonomous heat and water supply. The presence of a garage or secure parking on the premises or in the immediate vicinity of the building (ideally, an underground garage) plays an increasingly important role. An important sign of elite housing is the absence of people with low social status among the residents. The latter may end up in high-class apartments during the reconstruction of the building. According to existing standards, the former residents of such houses, evicted during reconstruction, have the right to move back in at the end of the reconstruction. Purchasing housing in such houses has certain advantages: the legal purity of the transaction, the opportunity to initially decorate your home to your own taste, a homogeneous social environment.

Houses that meet most of the above requirements are varied: brick, monolithic, there are even panel ones. Apartments in luxury buildings can be located on one or two levels. The number of floors of buildings is also different - 5, 9, 10, 12, 14, 17, 22, 26 floors. At the same time, a characteristic feature can be noted - the number of storeys increases with distance from the Center. The infrastructure of elite houses also varies in its development: they may have a sports complex, consumer services, a swimming pool, a sauna, and a winter garden.

The total area of ​​the apartment is 120-150 m2 and more, at the entrance there is a hall of 20 m2 with a small fountain and an aquarium, two bathrooms, a kitchen-dining room of 15 m2, guest and master areas on two levels.

The primary housing market is formed and functions from two sources: the sale by municipal authorities of apartments built with public funds, and the sale by citizens of privatized housing.

In Moscow, to monitor the housing market, 12 indicators of apartments offered for sale in 173 districts, mainly near metro stations, are monitored and analyzed. The monitoring form is presented in table. 4.4.

Table 4.4.

Designations in table. 4.4:

STmes - supply price (in dollars) of 1 m2 of total area on average over the last four weeks;

MINotkl (MAXotkl) - minimum (maximum) deviation (in dollars) of the average supply price of 1 m2 of total area with a 70% confidence probability;

PRmes (PRkv) - consumer priority of the area for the last month (quarter);

STkv - offer price (in dollars) of 1 m2 of total area on average over the last 12 weeks;

Mmes (Mq) - mathematical expectation of the weekly rate of change in the supply price (in dollars) for the last month (over the last three months);

Yakrat (kered) - short-term (medium-term) risks of real estate transactions. They characterize the share of risk introduced by the uncertainty of the market as a whole. The closer the values I to zero (0< I < 1), the more chaotic the behavior of the housing market is and the more balanced the manager’s decision should be;

GRP - a group of realtor attractiveness, determined by the integral market characteristics of the area (group names are conditional):

"+++" - extremely attractive;

<<++" - очень привлекательная; " + >> - very attractive; "+/-" - quite attractive; "-/+" - attractive;

"-" - not very attractive; rather unattractive than attractive (the validity of transactions must be confirmed by factors not taken into account in the analysis); unattractive (the validity of transactions must be confirmed by factors known only to the participants in the transaction);

place in the GRP - the ordinal place of the area in the group of real estate attractiveness, determined by its integral market characteristics.

In the primary and secondary markets of non-residential premises, according to their functional purpose, four main segments are distinguished: industrial, warehouse, office and retail facilities, the general characteristics of which are based on taking into account the location, area, quality of the premises, lease term, price or rent and other factors.

Office space forms the second (after housing) segment of the Moscow real estate market in size, where demand exceeds supply. Depending on the quality characteristics, office premises are divided into four classes: A, B, C, D.

TO class A include office premises in specialized business centers in the central areas of the city and near major transport routes. All offices in this category are equipped in accordance with Western standards, ranging from the most modern telecommunication systems to climate control systems. The interior, buildings and surrounding area are kept in exemplary condition, there are own management, maintenance and security services, and a guarded parking lot.

Office rooms class B have almost all of the above characteristics, but with a smaller list of additional services. Rental cost is from 700 to 900 dollars per 1 m2 per year.

The tenants of class A and B office premises are Western companies and large Russian firms.

The bulk of domestic firms prefer to rent office space of lower quality, related to classes C And D. The first of them is represented by offices in hotels, adapted premises (research institutes, educational institutions, etc.), located outside the city center, but at the intersection of transport routes, near metro stations. Rental rates range from $400 to $600 depending on the distance from the Garden Ring, services provided and rental conditions.

Unsuitable premises, located outside traffic intersections, belong to class D. Their undoubted advantage is the ability to obtain an area of ​​the required size for an affordable fee.

Rent rates fluctuate depending on the type of premises and location.

The warehouse market is differentiated by their type and equipment:

• o specialized warehouse complexes equipped with modern technical means, heating and other amenities;
• o modern equipped hangars;
• o basement and semi-basement premises;
• o first floors of various buildings;
• o converted bomb shelters;
• o other premises.

Enterprises as property complexes are currently entering the primary real estate market in the process of privatization of state and municipal property.

The market for unfinished construction is formed by municipal and private facilities that are not provided with financial, material and labor resources. It is based on the principle of mutual benefit - an agreement on a 50% distribution of constructed space between the investor and the owner (city, company).

The cottage market is developing rapidly in all regions of the country. In the Moscow region, for example, 160 thousand cottages were built on an area of ​​approximately 48 thousand hectares through private investment on the terms: 35% of the cottages are received by the investor, of which he sells 15% at closed auctions to local residents, 40% is bought by Moscow at cost, and 10% is donated to the city and region.

In conclusion, it should be emphasized that the functioning of the real estate market contributes to the development of the overall economic turnover of the country (Figure 4.10).

Scheme 4.10.

According to economic theory, the identification of types of market structures (monopoly, oligopoly, monopolistic competition, perfect competition, etc.) is made on the basis of the following characteristics: the number of sellers and buyers, the degree of product differentiation, barriers to market entry for producers and sellers, features of competition in the industry and etc.

Let's consider these criteria separately.

1. Number of sellers. In the primary residential real estate market, sellers include both large national-scale construction firms, the number of which is limited, and medium-sized regional firms. Currently, the all-Russian real estate market includes such large financial and industrial groups and holdings as: GC "SU-155" (Moscow) - the state's leading contractor for the construction of housing and socially significant facilities, including 64 industrial and construction enterprises in 17 cities of Russia, with a workforce of more than 45 thousand people, construction projects of which are being implemented in 50 cities of Russia, the CIS and Europe; PIK Group of Companies (Moscow) is one of the leading developers in the field of residential real estate with a well-thought-out social infrastructure in Moscow, the Moscow region and a number of regions of the Russian Federation, includes 19 subsidiaries. However, there are also a number of smaller construction firms.

Also, participants from other markets often enter the residential real estate market as sellers:

Developers from related construction industries (for example, ISKP LLC

"Volgo-Vyatka Construction Company", CJSC NPSK

“Metal construction”, etc.);

Manufacturers of building materials and individual structures

(for example, the company GC "Saxes", CJSC "78 DOK", etc.);

Large realtors (for example, the real estate agency “Vybor”).

Such participants, as a rule, consider the residential real estate market as one of the areas of business development and combine it with existing activities.

Based on the results of a survey of market participants, the RBC company compiles annual ratings of the 20 largest construction companies in the Russian Federation. According to her data, such companies accounted for about 11% of all meters delivered in 2012, and they built 28% more urban housing this year than in 2011 (see Appendix 3). In regional markets the number of companies is smaller, and the share of large companies is significantly larger. Obviously, in terms of the number of firms, the primary housing market is approaching a type of oligopoly with a competitive environment.

In the secondary residential real estate market, the number of sellers (in this case, households) is significantly larger, which gives this market segment the features of a competitive market structure. However, in the secondary market, sellers often act through specialized intermediaries - real estate firms. Their number is already significantly smaller, which reduces the degree of competitiveness of this market segment. Thus, the Nizhny Novgorod Guild of Certified Realtors (NGSR) in September 2011 included

27 companies. According to the criterion under consideration, this market segment is closer to the “monopolistic competition” type. Thus, according to

"number of sellers" The residential real estate market varies from monopolistic competition to oligopoly.

2. The degree of product differentiation in the residential real estate market is high. In the secondary real estate market there are: old housing, old

housing after major renovation, houses of the Stalin period, Khrushchev, Brezhnev, panel houses of the 60-70s, panel houses of the 80-90s, brick houses. In the Nizhny Novgorod region, according to the unofficial classification, residential real estate is divided into luxury housing, luxury houses, apartments with improved layouts, and standard housing. For the primary real estate market, the Moscow classification is used, according to which housing is divided into four classes: elite, premium, business and economy class. Also, housing of each class is distinguished by the type of material, location area (which differs, among other things, in environmental conditions), quality of floors, size of rooms, kitchen and other ancillary premises and, as a result, prices. Individual characteristics of housing are: floor, view from the window, layout, presence of cosmetic repairs, condition of electrical wiring, water supply and heating system, etc., incl. availability of a complete package of documents for the transaction. Among other things, there are also individual characteristics for each specific apartment. Thus, from the point of view of the properties of the object, the housing market belongs to the “monopolistic competition with product differentiation” type.

3. Barriers to entry into the industry. In the primary real estate market, barriers to entry into the market for sellers (customers, developers) are determined by barriers of a lower order - entry into the construction industry. First of all, to create a construction company it is necessary to go through the procedure of state registration of a legal entity. Further, to carry out construction, design and engineering survey activities, from January 1, 2010, you must join a self-regulatory organization (SRO) and obtain a certificate of admission to certain types of work. In addition to general barriers, there are also individual barriers relating to the construction of each specific facility. The main obstacles to increasing construction volumes are established in Federal Law No. 214-FZ “On participation in shared construction of apartment buildings and other

real estate objects and on amendments to certain legislative acts of the Russian Federation" dated December 30, 2004, which grants the developer the right to attract funds from equity holders only if there is:

· a document on state registration by the developer of ownership of the land plot being developed or a lease agreement for such a plot;

· construction permits;

· project declaration, which must be published in the media, since the developer can conclude an agreement for participation in shared construction with the first shareholder only after two weeks from the date of publication (No. 214-FZ dated

It is also necessary to note other barriers inherent in the primary real estate market:

A. Insufficient number of land plots on offer, their high cost and lack of transparency of tenders for their sale. Typically, several land plots are simultaneously offered for one residential area of ​​the city for infill development, which is reflected in the offer price. For example, the cost of plots of land that a developer can purchase for his own construction of multi-storey residential buildings in the city of Nizhny Novgorod is differentiated from 230 thousand rubles. up to 1 million rubles for 1 hundred. As for the prices for plots of land for low-rise individual housing construction both in the city and in the suburbs, the price range here is from 30 to 500 thousand rubles. for 1 hundred. The high cost of investment contracts and land is explained by the inclusion in their price of the so-called “administrative rent” - the corruption component of acquiring rights to a development site (registration of ownership or lease), connection to city utility networks, landscaping of the courtyard area and other expenses.

Currently, city authorities are paying great attention to the allocation of territories for integrated residential development: these can be both land plots in the suburbs and in places where there is a dilapidated emergency fund. However, this comes with certain costs for developers: land plots in the suburbs do not have utilities and access roads, and urban plots with dilapidated buildings require settlement costs. Despite the growth in housing construction in the Nizhny Novgorod region (at the end of the first half of 2012, this figure increased by 2.7% compared to the same period

2011), there is a shortage of construction sites that are interesting for investors.

An insufficient number of land plots does not always indicate that the size of the building areas themselves is small. So, for example, in

In 2012, the Ministry of State Property and Land Resources of the Nizhny Novgorod Region held an auction to sell the lease rights to 453 hectares of land in the Sovetsky district of Nizhny Novgorod. One lot united 14 land plots and was the largest land mass that was put up for auction by the authorities of the Nizhny Novgorod region. There was only one bidder at the auction, which was explained by the large volume (the creation of essentially a new district for 120 thousand residents) and the huge costs of building networks facing the developer. Thus, due to the reluctance of the authorities to independently develop a project for land surveying 453 hectares into separate plots for different investors, none of the Nizhny Novgorod housing construction leaders was able to participate in this auction.

B. Informal requirements for the construction business in the form of various kinds of social obligations. It is often practiced that the administration allocates a plot of land to a construction company for its own construction in a convenient location in exchange for its obligation to construct or reconstruct social infrastructure facilities: kindergartens, schools, hospitals, etc., or to transfer part of the finished property to the administration

constructed housing allocated for the implementation of government social programs. Due to the emergence of additional costs for fulfilling social obligations, construction companies are forced, after receiving all the necessary permits, to change (and re-harmonize) construction technologies, often to the detriment of quality and in violation of the rights of consumers (shareholders).

B. The need for a variety of highly specialized equipment. For numerous types of construction work, different types of equipment are needed (tower cranes: with different heights, lifting capacity and boom reach, free-standing on a rail or on an anchor base, with a device for self-extension of the crane tower and with the ability to attach the tower to the building under construction; pile driving equipment or pile presses installations; concrete mixing plants and concrete mortar units, concrete pumps, etc.). Given the small volume and temporary nature of the work, purchasing this entire set of equipment is ineffective. In addition, the purchase of a tower crane will cause an increase in associated costs: the construction company will have to add several people to the staff (1-2 crane operators, a mechanic responsible for the technical condition of the crane, an electrician), plus additional work will arise for the safety engineer. In addition, as a particularly dangerous construction site, the crane will need to be registered with the city department of Rostekhnadzor, and also put on the balance sheet of the enterprise. Finally, purchased equipment must be stored under certain conditions and a scheduled inspection must be carried out every 10 months. Almost all companies can afford to keep all the necessary equipment on their balance sheet, but not everyone has access to it in the form of contracting and leasing.

D. Interruptions in the supply of construction materials. An example is the shortage of cement described above (see paragraph 1.3.2) in the European part of Russia. Any problems that arise in entrepreneurial activity in a particular industry, whether of natural or artificial origin, can be considered as barriers to entry into it.

D. Lack of qualified personnel. Thus, despite the presence in the Nizhny Novgorod region of a large specialized industry university for training engineering and construction personnel (FSBEI HPE

"Nizhny Novgorod State University of Architecture and Civil Engineering), in the context of the boom in the construction industry, the residential real estate market is experiencing a shortage of specialists in a number of working professions and highly qualified engineering personnel, primarily specialists in new and highly specialized areas. Most graduates of educational institutions have good theoretical training, but they often do not have enough practical skills for work. There is an urgent shortage of qualified workers with secondary vocational education: masons, welders, etc. In addition, such professions, which in Soviet times were classified as mass, are not popular today and are considered not prestigious, which is explained by the complexity and difficult working conditions; the constant influx of low-skilled labor from abroad significantly reduces the wage level.

It should be noted that intermediaries also face such a barrier as the lack of qualified personnel, since currently the educational system of the Russian Federation does not train specialists in real estate transactions. In general, the lack of qualified personnel in the residential real estate market forces construction and real estate companies to work closely with specialized universities, open their own training centers to train specialists, and also resort to the services of recruiting agencies.

E. Excessive number of approval procedures. A study conducted by the Institute of Urban Economics Foundation in 43 cities of Russia allows us to conclude that there is an extremely high level of barriers in housing construction. On average, when constructing an apartment building, developers go through 100 procedures, spending about 3 years and 25 million.

rubles, and the majority of such costs (about 80%) are the costs of connecting (attaching) to engineering support networks. In total, today, according to experts from the SRO “National Association of Builders (NOSTROY)”, about 23 approval procedures are clearly redundant; their cancellation will reduce the time required to obtain a construction permit by about 600 days, which will significantly minimize the costs of project development.

The barriers to entry into the industry for sellers in the primary real estate market discussed above, especially the first three, are characteristic of an “oligopoly” type market structure.

In the secondary residential real estate market, entry barriers for non-professional sellers and buyers (households and their members) are insignificant (for sellers: availability of property and title to it; for buyers: availability of money; for both parties: legal purity of the transaction). At the same time, their motives for turning to a professional intermediary (real estate agency or individual realtor) may be: overcoming uncertainty and shifting risk to a third party, expanding choice and reducing time to find an acceptable option (which occurs both due to economies of scale and due to connections to search computer databases and professional technologies). Such treatment is effective if the savings on transaction costs are greater than the cost of the real estate company’s services.

In a market where transactions are carried out with the participation of a professional intermediary, additional barriers to entry arise. Thus, to create a real estate company, state registration of a legal entity or registration of an intermediary as an individual entrepreneur is required. Also important is the good reputation of the intermediary company, which acts as its important competitive advantage. A realtor's reputation is made up of various circumstances.

activity: time of presence on the market, scale of activity (visually often determined by the number of operating offices), presence of positive and negative reviews in the media, reflection of activity in professional publications, etc.

Some competitive advantage for a real estate company is also participation in a professional association (non-profit partnership) - the guild of realtors. However, there are also barriers here. To be accepted into the guild, you must: 1) obtain a certificate of compliance of the brokerage services provided with the requirements of the established standard; 2) own or officially use non-residential premises with a specially equipped room for negotiations that ensures confidentiality; 3) conclude a contract of professional liability insurance for the seller; 4) obtain a document for the right to use a trademark registered in the prescribed manner, under which brokerage services are provided.

There is a kind of brand effect at work in the real estate market.

– in this business it is very important to have not only a history, but also public recognition. For example, the fact that the Nizhny Novgorod real estate agency

“Choice” based on the results of the All-Russian competition “Professional Recognition –

2011”, held by the Russian Guild of Realtors, was recognized as the winner in the category “Best brokerage company in the housing sales market 2011” (more than 100 employees), giving the realtor a strong competitive advantage. Closely related to the brand effect is the trust effect. In a broad sense, we are talking about different types of trust: 1) institutional – in our case, trust in the intermediary institutions themselves; 2) organizational

– trust in specific organizations; 3) social – trust in public opinion and public behavior, when it is taken as a basis when making decisions; 4) personalized – trust in specific people. Often, without understanding the intricacies of the functioning of the real estate market, unprofessional buyers and sellers (households)

prefer to contact agents who are most in demand on the market or recommended by friends and acquaintances.

Reputation, trust, brand advantage - all these barriers to entry into the industry are characteristic of a market structure of the “monopolistic competition” type.

4. Features of competition in the real estate market. Considering the great importance of the individual characteristics of housing for different groups of buyers (quality of housing, living environment, reputation of the developer or intermediary real estate company, developer's guarantee, provision of title insurance services, assistance in obtaining a mortgage, etc.), among sellers the prevailing non-price competition. Price competition in the housing market plays a secondary role and comes into force if the transaction is urgent.

There is fair competition in the real estate market, but in modern conditions there are also such features of unfair competition as a decrease in the quality of materials and construction work, violation of the interests of buyers, bribery of officials (in order to obtain various types of permits, acquisition of land, etc.), damage to reputation competitors through the spread of false rumors, incl. using the media, industrial espionage and other actions that do not comply with the law and business ethics.

5. Sources of economic profit in the real estate market. For developers (housing manufacturers), the origin of economic profit is associated with the oligopolistic structure of the market. The possibility of obtaining excess income both in the construction industry and the real estate services sector is determined by the current macroeconomic situation in the country, as well as by the rational (to one degree or another) expectations of people and their assessment of development prospects, the dynamics of household incomes, the possibility and conditions of obtaining a mortgage loan and etc. For intermediaries (real estate firms) in the real estate market, profit is

reward for risk, as well as for overcoming information uncertainty that arises for the consumer of services at each stage of the transaction. Also, large real estate agencies can make speculative profits by investing in real estate and obtaining temporary price arbitrage. Particularly profitable investment objects are those apartments for which the urgency of the transaction is an important factor. There are also dishonest ways to obtain excess profits, the source of which is unfair competition or deception of the final sellers or buyers of goods.

A study of the characteristics of the residential real estate market according to various criteria allows us to conclude that it is more suitable to the type of market structure “monopolistic competition”, although some of its segments have the features of “oligopoly”, “perfect competition” and, in extreme cases, “monopoly”. In addition, this market is characterized by extreme heterogeneity, which determines the peculiarities of its functioning.

Let's summarize the first chapter. The residential real estate market is a market that can be studied from the perspective of both neoclassical and neo-institutional approaches, combining the economic and legal aspects of the study. The study revealed that the residential real estate market sells a special object that is both a benefit and a resource at the same time. This object has the features of a complex good that satisfies all five levels of the structure of needs in A. Maslow’s hierarchy. The housing market is divided into primary and secondary segments; housing purchased for consumer and investment purposes; segments distinguished by the quality and complexity of the object. They are characterized by different elasticities of supply and demand, and they have their own operating mechanisms.

The state of equilibrium in the residential real estate market is influenced by demand factors, supply factors and types of market structures. The chapter details

analyzed the influence of the following demand factors in the residential real estate market: consumer preferences and tastes, product quality, buyer income, prices for other goods and services, time factor, number of buyers, consumer expectations of any political or economic changes, taxes and subsidies (subsidies) buyers, aggregate demand shocks. Demand for housing is highly price elastic (due to the income effect, while the substitution effect is insignificant), and it is differentiated for segments of different quality of housing. Also, the demand for housing is characterized by high elasticity in terms of income and accumulated savings of buyers in the long term. The following factors of housing supply have been studied in detail: prices and availability of resources (factors of production), new (more productive) technologies, taxes and subsidies (subsidies) on sellers, prices for goods associated with production; number of sellers of residential real estate, external supply shocks. It was revealed that housing supply is characterized by low elasticity in the short term and higher elasticity in the long term, which also depends on barriers to entry into the construction industry. To identify the types of market structures, the following characteristics of the housing market were analyzed in the work: the number of sellers, the degree of differentiation of residential real estate, barriers to entry into the industry, features of competition in the residential real estate market, sources of economic profit. It is concluded that the primary housing market varies from the type of monopolistic competition to oligopoly, and the secondary housing market varies from perfect competition to monopolistic competition.

The conducted theoretical research allows us to move on to the analysis of specific features and trends of the residential real estate market in modern Russia.

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Ministry of Education and Science of the Russian Federation

Federal State Budgetary Educational Institution

Vyatka State University

Faculty of Construction and Architecture

Department of Finance and Economic Security

Course project

in the discipline Expertise and inspection of the investment process

Developed by a student

gr. ST 38-01 Stepanenko A.A.

Head Loginov D.A

Introduction

Chapter 2. Practical part

Conclusion

Application

Introduction

As a result of the emergence of privately owned real estate in Russia, a real estate market began to form and develop, which is based on the purchase and sale of ownership rights to real estate.

An increasing number of Russian citizens, enterprises and organizations are involved in real estate transactions - it is built, sold, bought, rented, mortgaged, exchanged, etc. However, the lack of a properly developed legislative framework in Russia regulating relations in the real estate sector initially directed the development of the real estate market along a spontaneous path. Obviously, this is why the Russian real estate market will not soon come into line with the world one.

My course work reveals such a concept as the real estate market, its characteristics and functions.

With the transition from a centralized, planned to a market economy, a new sector of the Russian economy began to develop - the real estate market. The starting point of its development should be considered 1990, when the “Law on Property in the USSR” recognized the concept of private property, which was later legislated for land plots, buildings and structures and their separate parts - premises.

The purpose of the course work: to consider the classifications and functions of real estate markets, as well as to solve the practical part of the work.

Objectives: 1) Study the concept of “real estate market”;

2) Consider the classification of real estate markets;

3) Reveal the features of real estate markets as a product;

5) In the analytical part of the project, you should analyze:

1. Costs for reconstruction of the property.

2. Costs of operating the property after its reconstruction, taking into account the market situation.

3. Choose the best option for reconstruction and further operation of the property.

real estate market reconstruction costs

Chapter 1. Classification of real estate markets. Brief description of markets

The real estate market is a mechanism through which interests and rights are connected and real estate prices are set.

The real estate market and the level of its development characterizes the development of the national economy. The following stages can be distinguished in the development of the real estate market in Russia.

Real estate occupies a central place in the system of knowledge in any social system, simultaneously performing two important functions: a means of production and an item of personal consumption for living, recreation, cultural leisure, etc. The economic and legal regulation by the state of various spheres of social life and material production is closely related to real estate.

The main, basic object of real estate - land - has a unique significance in the entire system of people's entrepreneurial activities and their very lives. It is of particular value for the entire human society, since it is the only place of residence of all peoples and generations of people, the main and only factor in any area of ​​​​business, directly or indirectly involved in the production of all other goods and benefits. Real estate is at the center of the combination of economic processes, private and public interests, administrative norms and rules.

Real estate is an object of economic and state interests

Real estate as a commodity is an object of transactions (purchase and sale, donation, pledge, etc.) that satisfies various, real or potential needs and has certain qualitative and quantitative characteristics.

Real estate is the most durable product of all existing ones, providing security of investment, since its value can increase over time under the influence of various factors. Another important feature of real estate is that real estate goods are consumed at their location, which is why such an economic characteristic as territorial preferences arises. Other economic features of real estate are the unevenness of cash flows, differentiation of taxation, variety of combinations of property rights, strict regulation of transactions, liquidity and the need for management. In market conditions, property management is a complex integrated system for meeting the needs for a specific type of real estate.

The real estate market has a great influence on all aspects of people’s lives and activities, performing a number of general and special functions: pricing, regulatory, commercial, redevelopment, informational, intermediary, stimulating, investment, social.

The functioning of the real estate market is carried out by its subjects, which include: sellers, buyers, professional participants, government bodies.

Professional market participants are realtors, appraisers, dealers and other intermediaries. Real estate is considered to be an activity carried out by legal entities and individual entrepreneurs on the basis of an agreement with an interested person (or by proxy) to carry out civil transactions with land plots on his behalf and at his expense or on his own behalf, but at the expense and in the interests of the interested person , buildings, structures, structures, residential and non-residential premises and rights to them.

The real estate market has a branched structure and can be differentiated according to various criteria: type of financial asset, geographical factor, functional purpose and other indicators presented in table. 1.

Table 1

Classification of real estate markets

Classification sign	Types of markets
Object type	Land, buildings, structures, enterprises, premises, perennial plantings, real rights, other objects
Geographical (territorial)	Local, city, regional, national, global
Functional purpose	Industrial premises, residential, non-industrial buildings and premises (offices, warehouses, etc.)
Degree of readiness for operation	Existing facilities (old stock), unfinished construction, new construction
Type of participants	Individual sellers and buyers, intermediate sellers, municipalities, commercial organizations
Type of transactions	Purchase and sale, lease, mortgage, property rights (lease, pledge, etc.)
Industry affiliation	Industrial facilities, agricultural facilities, public buildings, others
Type of ownership	State and municipal facilities, private
Transaction method	Primary and secondary, organized and unorganized, exchange and over-the-counter, traditional and computerized

Consideration of the real estate market is impossible without its segmentation.

Segmentation of the real estate market is its division into homogeneous groups of buyers. The following main segments of the real estate market are distinguished:

1. Housing market;

2. Commercial real estate market;

3. Land market.

Housing market

The housing stock makes up more than 20% of the reproducible real estate in Russia, and taking into account residential buildings on garden and dacha plots - about 30%. The volume of investment in housing construction is approximately a quarter of its total volume; about 13% of the working population is employed in the construction and operation of housing. However, millions of families and individuals live in communal apartments, dormitories or rent space from private individuals, live in dilapidated and dilapidated houses, stand in line for improved housing conditions, live crampedly - on an area of ​​5 m2 per person.

An acute housing shortage is a chronic phenomenon for Russia. Currently, the housing problem is aggravated by the constant influx of refugees and forced migrants from neighboring countries. At the same time, the transition to market relations led to a reduction in housing construction at the expense of the state budget, which previously was the main source of investment in housing construction.

A great need for housing exists at the same time as the average level of income of the modern Russian family is low, which does not allow the majority of the population to apply for the purchase of housing. The main group of buyers currently forming the demand for housing is 4-6% of the population. Consequently, as soon as sustainable development of the economy begins, the well-being of citizens will begin to increase, and the population’s demand for housing will begin to grow at an accelerated pace.

The housing market is divided into the urban housing market and the suburban housing market.

The urban housing stock is divided into several groups, taking into account the nature of the development:

· low quality housing, standard housing, buildings from Stalin times, houses with improved layout,

· luxury housing. At the same time, the quality of housing and its location are the main parameters,

· influencing demand in the housing market and taken into account in housing prices. Quality of living quarters

· characterized by 20-30 indicators, including the size of the kitchen, the presence of a balcony or loggia,

· layout of rooms, bathrooms, views from windows, etc.

For example, luxury housing in Moscow refers to apartments located in buildings that meet the following requirements. They must be built (or reconstructed) relatively recently (no more than 15 years ago). Such houses are usually located in the Center, or in an ecologically clean area adjacent to the Center, or even in a remote area (sometimes outside the Moscow Ring Road), but it must be possible to quickly get to the Center. It is mandatory to have a concierge or security guard in the house, and, ideally, security of the surrounding area. The work of the services responsible for maintenance and maintaining order in the building must be carried out at a high level; It is also desirable to have an autonomous heat and water supply.

The presence of a garage or secure parking on the premises or in the immediate vicinity of the building (ideally, an underground garage) plays an increasingly important role.

An important sign of the “eliteness” of housing is the absence of people with low social status among the residents. The latter may end up in high-class apartments during the reconstruction of the building. According to existing standards, former residents of such houses, evicted during reconstruction, have the right to move back in after its completion. Purchasing housing in such houses has certain advantages: the legal purity of the transaction, the opportunity to initially decorate your home to your own taste, a homogeneous social environment. Houses that meet most of the above requirements are varied: brick, monolithic, there are even panel ones. Apartments in luxury buildings can be located on one or two levels. The number of floors of buildings is also different - 5, 9, 10, 12, 14, 17, 22, 26 floors. At the same time, the number of storeys increases with distance from the Center. The infrastructure of elite houses also varies in its development: they may have a sports complex, welfare services, a swimming pool, a sauna, and a winter garden.

The total area of ​​the apartment is 120-150 m2 or more, at the entrance there is a hall of 20 m2 with a small fountain and an aquarium, two bathrooms, a kitchen-dining room of 15 m2, guest and master areas on two levels.

The formation of the suburban housing market is associated with the lifting of restrictions on individual suburban construction. Despite the difficult economic situation in the country, the growth of a fairly prosperous stratum of the population has intensified the demand for country houses and cottages.

The demand for suburban housing depends on the location (distance and direction from the city), the availability of modern communications (electricity, gas, sewerage, water supply, telephone), the proximity of recreational areas (reservoirs, forests), ensuring personal safety and security of property.

Commercial real estate market.

The commercial real estate market began to take shape in connection with the privatization of enterprises and the development of market relations; it is much smaller than the housing market, the number of transactions carried out is small; rental transactions predominate. The commercial real estate market has great prospects and reserves for its development, especially in large cities, but it is developing slowly.

The rental rate for commercial real estate depends on:

Type and location of the object;

Availability of a separate entrance, security, parking spaces,

Infrastructure;

This market is divided into two segments, which are differentiated by functional purpose: the office market and the retail space market.

The office market in large cities forms the second largest segment of the real estate market (after housing). The office space market has good prospects for its development, since the freedom to conduct business activities leads to the creation of more and more new business structures that require premises for their functioning. Three main sectors have emerged in the office market:

1. Prestigious offices that meet international standards for administrative premises. They are located in specialized business centers in the central areas of the city and near major transport routes. All offices in this category are equipped in accordance with Western standards, ranging from the most modern telecommunication systems to climate control systems. The interior, buildings and surrounding area are kept in exemplary condition, there is its own management, maintenance and security service, and a guarded parking lot. The rent in such premises is very high. For this reason, some Russian entrepreneurs often rent first-class offices abroad at more affordable prices.

2. Offices located in well-finished and equipped premises, and sometimes in well-occupied and well-renovated large apartments and hotels. Rental rates here are acceptable for successfully operating companies; there is active demand in this sector, which is constantly growing.

3. Premises in municipal and departmental non-residential buildings, state enterprises (mainly scientific institutions), cooperative and private enterprises. These are premises without finishing, renovation and related services. Rental rates here are low. Unsuitable premises located outside traffic intersections.

City centers are the optimal location for offices, but traffic congestion and lack of parking reduces overall accessibility. The location of offices in areas of the central zone, which is also used by shops, allows for more intensive use of land, because retail areas above the third floor are almost never visited. Offices to some extent increase retail turnover through the consumption of its services.

Recently, there has been a tendency to separate the location of the top management of companies and general administrative management, accounting, and current management. At the same time, senior management, which needs contacts with the surrounding business environment, is located in the head offices in the center, and middle and lower managers move to the suburbs.

The activities for which offices are used serve all areas of the economy, so the demand for these activities is directly dependent on the level of overall economic activity.

The rental value of retail real estate will largely be determined by the degree of elasticity of supply and turnover.

Specialty goods (prestige goods) and specialty goods tend to have high income elasticity and are purchased infrequently. Therefore, buyers are willing to incur transportation costs to search and compare suitable options. For stores selling such a range, general accessibility from as many areas as possible comes to the fore.

Therefore, these stores are willing to pay high rents for a location in the central business district.

Everyday goods are purchased frequently, so convenience stores optimize their location near homes or places of work. As a rule, such stores are willing to pay the maximum rental price near public transport stops, especially the metro and electric trains. At the same time, it is typical to create large shopping centers in the suburbs, where, in addition to the trading function itself, there are also complementary ones - banks, post office, insurance companies, restaurants, discos, etc.

The predominant form of transactions in the market of retail premises in the city center is the purchase and sale of retail premises, outside the center - the rental of premises. Rent rates in the center and on the outskirts differ several times. As practice shows, in Moscow, for example, rental rates are becoming unaffordable for Russian trading companies selling cheap goods to the population. Their place is taken by fashionable shops. Many buyers first rent a commercial establishment to check whether trade will work in a given place or not, and then buy it.

The practice is developing when a plot of land is rented on which trade is carried out from vehicles or from containers.

Industrial real estate market

At its core, industrial real estate is a place for the production or storage of goods. Depending on the nature of the product, the organization of production and the functions performed, industrial real estate may be subject to various requirements, for example, floor height, floor loads, temperature and humidity conditions, the possibility of loading and unloading operations, transport accessibility, etc. Rental cost will depend on the property's ability to maximize profits for potential tenants. Trends in rental prices, as a rule, have a pronounced cyclical nature, correlating with the cyclical changes in overall economic activity. Due to the ongoing economic crisis, the sale of enterprises as property complexes has not become widespread. Investments in industrial real estate are riskier compared to commercial real estate because industrial real estate is more vulnerable to economic fluctuations.

The location in an urban area will depend on the nature of the activity, the size of the market and the stage of development of the firm. Firms with a small localized market (printing houses, small repair and construction companies) may prefer to be located in close proximity to their market. Large firms prefer to locate on the edge of the urban area for reasons of proximity to transport routes and the ability to use large areas.

A dynamically developing segment of the real estate market is the warehouse market. It is differentiated by type and equipment:

Specialized warehouse complexes equipped with modern technical equipment

facilities, heating and other amenities;

Modern equipped hangars;

Basement and semi-basement premises;

First floors of various buildings;

Converted bomb shelters;

Other premises.

Currently, the following main forms of providing warehouse space are used: rent, safekeeping of cargo, safekeeping with insurance.

Rent rates in the warehouse market are differentiated depending on the level of equipment of the warehouse, its location, and distance from transport hubs.

Supply on the warehouse market is trending upward. An increase in the need for warehouse facilities as the number of business entities increases will create a guaranteed demand for warehouse space.

Land market (agricultural real estate)

Agricultural property refers to land with existing improvements intended for agricultural production. In the current market, the supply of agricultural real estate is inelastic, so the rental value will be determined by demand, which, in turn, will depend on the productivity of the land, production costs and prices for final products. The demand and price of plots for sale also depend on the purpose of the plot (for residential development, for gardening, for peasant farming), distance from the city, prestige of the area, the presence of nearby reservoirs and forests.

In many countries, land is one of the main assets traded in the real estate market. In Russia, the land market is just beginning to take shape. There are transactions with garden plots, summer cottages, and a small number of transactions with the lands of purchased enterprises. The formation of the land market and the formation of market prices for land plots are occurring, however, at an insufficient pace, which is explained by the imperfection of the legal framework and the current mechanism of land relations.

Characterizing the land market of the Russian Federation, it is necessary to note the following.

Despite the fact that, in accordance with the Law “On Land Reform,” private ownership of land was allowed back in 1990, things did not go further than declaring the possibility of private land ownership.

The Land Code of the RSFSR, adopted in April 1991, significantly limited the circle of potential owners and their rights. Privatization mechanisms were also not worked out. The state then and now still remains the main landowner and retains all its control functions. Each market segment presented can be divided into other segments. For example, the housing market is divided into the urban housing market and the country housing market, the non-residential market into the retail real estate market, office market, warehouse market, etc.

According to Jack Friedman and Nicholas Ordway, “The real estate market is a defined set of mechanisms through which property rights and related interests are transferred, prices are set, and space is allocated among various competing land uses.”

However, a more complete definition of the real estate market, which represents a complex of relations associated with both the creation of new real estate and the operation of existing ones.

“The real estate market is an interconnected system of market mechanisms that ensure the creation, transfer, operation and financing of real estate.”

The real estate market is a collection of regional, local markets that differ significantly from each other in price levels, risk levels, efficiency of real estate investments, etc.

The real estate market has a number of features presented in table. 2.

table 2

Features of the real estate market

	Characteristic
Localization	Absolute stillness High price dependence on location
Type of competition	Imperfect, oligopoly Small number of buyers and sellers The uniqueness of each object Price controls are limited Entering the market requires significant capital
Elasticity of supply	Low, with an increase in demand and prices, supply increases little Demand can be very variable
Degree of openness	Transactions are private Public information, often incomplete and inaccurate
Product competitiveness	Largely determined by the surrounding external environment, the influence of the neighborhood The specificity of individual preferences of buyers
Zoning conditions	Regulated by civil and land legislation, taking into account water, forestry, environmental and other special laws Greater interdependence of private and other forms of property
Registration of transactions	legal difficulties, restrictions and conditions
Price	includes the cost of the object and related rights

Through the market mechanism and government regulation, the real estate market provides:

Creation of new real estate objects;

Transfer of rights to real estate;

Establishing equilibrium prices for real estate;

Operation (management) of a real estate property;

Allocation of space between competing land uses;

Real estate investing,

while performing the following operations with real estate:

* with change of owner:

Purchase and sale of real estate;

Inheritance;

Donation;

Ensuring the fulfillment of obligations (for example, the sale of mortgaged or seized real estate);

* with partial or complete change in the composition of owners:

Privatization;

Nationalization;

Changes in the composition of owners, including the division of property;

Contribution to the authorized capital;

Bankruptcy (liquidation) of business entities (with the satisfaction of creditors' claims, including through the sale of property of the owners);

* without change of ownership:

Real estate investing;

Real estate development (expansion, new construction, reconstruction);

Changes in the direction of use, brand name, legal address, etc.;

Management, operation;

Transfer to economic management or operational management, for free use;

Regularly received income from owning real estate, which does not require the recipient to engage in entrepreneurial activity;

Lifetime maintenance with dependents;

Transfer to trust management;

Introduction (removal) of easements and other encumbrances;

Insurance of various forms and various operations, including real estate development lending.

All these operations in a market economy are carried out using market mechanisms, and therefore they constitute the real estate market.

Chapter 2. Practical part

The object consists of two combined buildings, which, according to the time of their construction, are divided into two stages:

1) a four-story residential building with office space and underground parking for 38 cars. The facility was put into operation in 2009;

2) a multi-storey group of blocked houses in which separate 2-level apartments are located.

The property has passed to a new owner. The type of use and return expectations associated with Stage 1 are quite satisfactory to the owner. However, he has doubts about the economic feasibility of stage 2 (multi-storey block houses).

The owner is considering options to improve the efficiency of his property. In this regard, he considers three options for using his object:

Option A

Blocked single-apartment residential buildings. Parking spaces are located on two floors, commercial premises are located at street level, the main volume of the building consists of residential apartments, each of which has a separate entrance, both from the yard and from the parking hall

Area balance

Name
total area
commercial premises
office rooms
apartments
Technical buildings
parking hall
area for 1 car
places for cars
apartment height
height of commercial premises

Option B

Reconstruction option with various combinations of apartment options. Parking spaces are located on one level, a large number of different commercial premises are provided at street level, apartments have separate entrances either from the yard or from the staircase, apartments are one-, two- and four-level. There is a staircase and elevator connection to the courtyard, both from the parking hall and from the street level. The building is planned to have 60 apartments, the average apartment area is 115 m2.

Area balance

Name
total area
commercial premises
office rooms
apartments
Technical buildings
parking hall
area for 1 car
places for cars
apartment height
height of commercial premises

Option C

The building is being converted into an office and commercial center. Parking on one floor. There are many commercial premises on the ground floor. The building contains mainly offices with separate entrances from the street or from the shopping arcade. From the parking hall there is an elevator and staircase connection with the shopping gallery and part of the offices. Thanks to the post-and-beam structure of the building, commercial premises can easily be redesigned and divided into separate blocks.

Area balance

Name
total area
commercial premises
office rooms
apartments
Technical buildings
parking hall
area for 1 car
places for cars
apartment height
height of commercial premises

Initial data on the market situation for the assignment

1. Projected changes in costs for maintenance and routine repairs of housing and office and commercial buildings by year (in percent)
2. Projected changes in property values ​​by year (in percent)
3. Forecast changes in rental rates for all types of real estate by year (in percent)
4. Occupancy rate of residential premises by tenants by year (in percentage)
5. Occupancy rate of office space tenants by year (in percentage)
6. Occupancy rate of commercial premises by tenants by year (in percentage)
7. Degree of occupancy of parking spaces by tenants by year (in percentage)
8. Rent level for residential premises based on the base year 2016 (in rubles/m2)
9. Rent level for commercial premises based on the base year 2016 (in rubles/m2)
10. Rent level for office premises based on the base year 2014 (in rubles/m2)
11. Rent level for parking spaces based on the base year 2014 (in rubles/m2)
12. Sale price of apartments in 2016 (in rub./m2)
13. Sales price of office premises in 2014 (in rubles/m2)
14. Sales price of commercial premises in 2016 (in rubles/m2)
15. Sales price of parking spaces in 2016 (in rubles/m2)
16. Maintenance and current repairs of housing in 2016 (in rub./m2)
17. Maintenance and ongoing repairs of office and commercial premises in 2016 (in rubles/m2)
18. Annual depreciation rates for options A, B, C (in percent)
20. Rent for a land plot in the base year 2016 according to options A, B, C (RUB/year)
21. Sale price of real estate (at the beginning of 2014) before repairs according to options A, B, C, (thousand rubles / m 2)
22. Investment costs for repair and reconstruction of real estate at the beginning of 2014 (according to reconstruction option A), (thousand rubles/m 2)
23. Investment costs for repairs and reconstruction of real estate at the beginning of 2014 (according to reconstruction option B), (thousand rubles/m 2)
24. Investment costs for repair and reconstruction of real estate at the beginning of 2014 (according to reconstruction option C), (thousand rubles/m 2)
25. Rented or sold parking spaces.
For all options, assume the area of ​​one parking space is 30 m2. The number of parking spaces is determined as the option area of ​​the parking hall (from Tables 3.1, 3.2, 3.3), calculated in square meters. meters divided by the area of ​​one parking space.
26. Income tax.
Accept 20% for all options.
27. Cost of borrowing capital, % per annum

Share of attracted capital in investment costs (percentage)

Time of repayment of attracted capital and method of repayment of debt

For all options, accept a payment time of 10 years, and the method of repaying the debt - in equal shares of 10% with the first payment in 2015.

Initial data for calculating the profitability of reconstruction options A, B, C at the current cost of cash receipts

Discount values ​​as a percentage for calculation options A and B	Discount values ​​as a percentage according to calculation option C

General initial data

Quest Items
1. Forecast changes in maintenance and routine repair costs, %
2. Forecasted changes in real estate value, %
3. Forecast changes in rental rates, %
4. Degree of occupancy of residential premises by tenants, %
5. Occupancy rate of office space tenants, %
6. Occupancy rate of commercial premises tenants, %
7. Degree of occupancy of parking spaces by tenants, %
8. Rent level for residential premises, rub/m2
9. Rent level for commercial premises, rub/m2
10. Rent level for office premises, rub/m2
11. Rent level for parking spaces, rub/m2
12. Sale price of apartments, rub/m2
13. Sales price of office premises, rub/m2
14. Sale price of commercial premises, rub/m2
15. Selling price of parking spaces, rub/m2
16.Maintenance and current repairs of housing, rub/m2
17. Maintenance and current repairs of office and commercial premises, rub/m2

Calculations were performed in Excel.

In order to determine the optimal investment solution, it is necessary to determine the amount of income and expenses for a certain period and calculate the total value.

First, we analyze the initial data and use it to determine rental levels, sales price, and maintenance costs over a five-year period. Having calculated all the costs, we can determine the rental income received from the property by year and the amount for 5 years and find the income from the sale of all real estate after 5 years of operation.

Then we determine the cost of maintaining our facility by year and find the amount for 5 years. Then we find other expenses, which include land rent, investment costs and depreciation. After determining the amount of all income and expenses, we find the profit from our activities and charge tax on it, then add up the profit received from rent and sale, and get the final value.

A comparison of the options showed that the most profitable option for increasing the efficiency of one’s property is option C, followed by option B. Option A occupies the position of the most unprofitable option among those listed.

Conclusion

As a result of the work done, the following conclusions can be drawn:

The real estate market in Russia today is in its formation stage. Its development is uneven. The reasons for uneven development are: the lack of a systematic legislative framework in this area to date, unjustified privatization, economic instability and inflation, risky investment activities, etc.

The real estate market is an essential component in any national economy.

The real estate market is closely related to other markets. Without a real estate market there cannot be a market at all, since when the market for goods and services, the labor market, etc. will not have for their existence the rented premises necessary for their activities.

In addition, real estate is a profitable investment because... funds invested in real estate are protected from inflation.

Thus, it should be noted that the effective improvement of the real estate economy in the conditions of modern Russia is a promising direction, and it needs to be studied, improved and developed using foreign and domestic experience.

Application

Balance of areas for option A

Name
total area
commercial premises
office rooms
apartments
Technical buildings
parking hall
area for 1 car
places for cars
apartment height
height of commercial premises
rental income
Types of premises
Living spaces
Office rooms
Commercial premises
Parking places
sales proceeds
Types of premises
Living spaces
Office rooms
Commercial premises
Parking places

...

maintenance costs
Types of premises
Living spaces
Office rooms
Commercial premises
Parking places
other expenses
Land lease
Investment costs
Depreciation
total values
rental income
running costs

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