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The real estate sector is facing forced sales of development portfolios, and small players will go bankrupt because of a lack of refinancing resources at home and abroad, Renaissance Capital said Thursday.
Russia's largest investment bank said in a research note that it expected early stage projects and land holdings to be the hardest hit because of cash-strapped developers attempting to offload large land banks.
"However, we believe that after an initial bout of forced or accelerated selling, the tightening of credit or the effective closure of the credit market will have a more pronounced effect on the supply, rather than the demand, side of the property market," RenCap said.
"This means that given the healthy demand backdrop, tightening supply will eventually push prices up across all segments of the market sometime in the future."
"Tighter credit market conditions should eventually prompt consolidation in the property market, with larger players boosting their market share to the detriment of smaller, highly leveraged companies."
Russian residential property prices have risen more than 10 times over the past decade, and many analysts and industry watchers predict a steep decline in the next six to 12 months.
Fitch ratings agency has also repeatedly warned that heavy short-term debt positions of some real estate companies might ultimately lead to forced asset sales.
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Russian Billionaire Pays Record $88M for New York Apartment
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2.
Skolkovo's MIT Seeks to Stop Brain Drain
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Doubts Nag Prokhorov's Candidacy
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Putin Discouraged From Solo Bobsled Ride
Prime Minister Vladimir Putin inspected a bobsledding training course outside Moscow on Thursday, taking a test run as a co-pilot.
5.
In the Hot Seat
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6.
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7.
Three "Hamsters" Arrested Outside U.S. Embassy
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Opposition Rally Barred From Central Square
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Duma Reform Could Reduce Poll Trickery
A bill submitted to the State Duma by President Dmitry Medvedev would ban political parties from putting nationally known figures on regional parliamentary election lists while increasing the number of electoral districts from 80 to 225.
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Putin Plan Targets Population Drop
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Journalist Booted After Visa Violation
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General Says Russia Could Use Nuclear Weapons to Keep Country Intact
Russia's armed forces would be within their full rights to use nuclear weapons if any threats to the integrity of the country arise, Russian General Staff head Nikolay Makarov said Wednesday.
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Moscow Is Unlovable and Unlivable
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Report: United Russia Might Be Dismantled
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HIV Prevention Falls Short as Funding Ends
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Officer on Atomic Submarine Commits Suicide
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8.
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Start of Stadium Demolition Draws Outcry
Architectural preservation group Arkhnadzor said Monday that demolition at the constructivist-era Dynamo football stadium as a part of ongoing building work was against the law.
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Russian Billionaire Pays Record $88M for New York Apartment
Monaco-based potash tycoon Dmitry Rybolovlyev has bought the priciest piece of residential real estate in New York City, paying $88 million for a Manhattan penthouse.
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Election Webcam Installation Begins
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Feminist Punk Band Become Unlikely Putin Foil
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Why Putin Is Mad at Me
Prime Minister Vladimir Putin got very angry last Wednesday when he met with the editors-in-chief of Russia's top media outlets.
5.
Putin Plan Targets Population Drop
Prime Minister Vladimir Putin unveiled his plan on social policy Monday, focusing on how Russia will boost its dwindling population amid a demographic crisis that threatens to turn the country into "void space."
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Putin Stand-In Faces Zhirinovsky Fire
In Tuesday's second presidential debate of the campaign season, firebrand Vladimir Zhirinovsky harangued Prime Minister Vladimir Putin's levelheaded proxy over her patron's refusal to debate and alleged desire to rule for life.
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Recruiters Say Mother Russia Seeking Talent
Demographics make it a candidate’s market, but foreigners have to offer something unique to find their place.
8.
Pro-Putin Song Is Web Hit
A schmaltzy music video hailing Prime Minister Vladimir Putin as Russia's savior became a hit on the Russian Internet on Tuesday, with many bloggers and YouTube users poking fun at the song's hyperbolic lyrics.
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Journalist Booted After Visa Violation
A prominent French writer and journalist has been kicked out of the country on the grounds that she did not have the right to research a book while on a business visa.
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From Protest to Nausea
The history of successive authoritarian regimes in Russia reveals a recurring pattern: They do not die from external blows or domestic insurgencies.
