Mayor Says Time to Buy Apartments

Itar-TassLuzhkov, viewing a model of a Moscow district with Putin and Resin, says housing costs will not decline any further.
The Mayor's Office would like for all those interested in purchasing a Moscow apartment to know that there is no time like the present.

Despite ubiquitous forecasts of steep declines in real estate prices, the city government is saying such a situation is impossible.

"No matter how much we would like [for apartment prices to fall], we need to look truth and reality in the face. Right now, it is impossible," Mayor Yury Luzhkov said Tuesday at a city government meeting, Itar-Tass reported.

Two other City Hall officials at the meeting blamed a media disinformation campaign for convincing potential homebuyers that there would be a precipitous decline in real estate prices this year.

"At the moment, it's really difficult to get credit. The rates are really high -- this is what's stopping people. And disinformation about the fall in prices is inciting people not to buy apartments," said Vladimir Resin, the head of the city building complex.

First Deputy Mayor Yury Roslyak agreed, saying that because of media reports the housing market is in a state of "complete stagnation."

In the last week alone, the average housing price in Moscow decreased by 0.8 percent, according to IRN.ru real estate monitoring agency.

The city has played a role, however, in propping up housing prices.

In October, City Hall announced a $2 billion bailout plan to help key developers under financial strain.

Since then, Moscow has gone on a buying spree, snapping up unsold apartments from developers at retail prices ranging from $2,700 to $3,100 per square meter. The city has since tried to renegotiate prices.