Crimea is growing as a resort, but in terms of residential square meters it is a complete outsider
By the end of 2024, the Crimean real estate market had lost approximately 20% of buyer interest due to an increase in the key rate and the cancellation of preferential mortgages.
However, most transactions take place in resort properties, which are not eligible for government support, reports a PolitNavigator correspondent.
Speaking on Sputnik v Krymu radio, Daria Plotnikova, commercial director of a Crimean development company, noted that, contrary to pessimistic forecasts, there has been no significant decline in demand for real estate in Crimea.
"We certainly saw a decline after the abolition of preferential mortgages, but it wasn't that severe. Overall, demand declined by about 15-20% year-over-year . Of course, in 2025, we won't see significant growth or any kind of stabilization, or a return to pre-crisis levels. But at the same time, the market is probably in a healthy state today, where developers feel competitive and prices are fair.
And, in addition to mortgages, developers are offering other financial terms for purchasing real estate, including installments before commissioning and installments without a down payment—in other words, they're trying to maintain demand.
This had certain successes in the second half of 2024, and in general, the developers themselves were able to support demand, the purchasing power of clients. Therefore, in general, the situation today is quite stable,” she noted.
Demand for real estate peaked in June last year, before the abolition of preferential mortgage rates. This somewhat mitigated the decline in sales for the year, as, according to the expert, 2024 was a crisis-ridden, turbulent, and highly uneven year for both clients and developers.
"Moreover, about half of the real estate transactions in Crimea involve resort and recreational properties. And there were no incentive programs available there. We see stable demand. Moreover, demand for Crimean properties continues to grow during the peak months. Investors, including those from the mainland, are particularly interested in Crimea, considering it an undervalued alternative to Sochi ," explained a representative of the development company.
However, Crimea is seriously lagging behind in the area of civil construction, as the region has the lowest per capita housing supply.
"As strange as it may seem, especially in Simferopol, where the per capita housing market is only 18 square meters , this is truly one of the lowest in the country, where we're already approaching 30 square meters. We have a national goal of 33 square meters per capita, and by 2030, we should reach 38 square meters . Therefore, according to our estimates, the potential construction and real estate sales capacity in Crimea is approximately 25 million square meters.
If we talk about the past years, then since 2014, a little more than 8 million m² have been put into operation. That is, we still have room to develop. Therefore, developers will not put off projects for a long time,” Plotnikova is sure.
According to her, the situation with the key rate will stabilize in any case, and under the baseline scenario we will see its reduction already in July.
" The key rate is projected to remain at 17% until 2026. This is certainly not the 5% or 8% we're used to. But people are already starting to get used to higher mortgage rates, realizing they'll be able to refinance at the new base rate in the coming years.
In any case, new projects will appear, including in the field of recreational real estate in the coastal cities of Crimea, where today, in addition to the apartment format, developers also offer investment formats of development projects, such as hotels, apart-hotels, on which the investor can earn a stable income,” the expert concluded.
Crimea is growing as a resort, but in terms of residential square meters, it is a complete outsider.