Moscow Housing Cools Off

The steady rise in prices for Moscow residential real estate slowed in May, real estate firm Miel said Monday, which analysts attributed to an increase in available apartments.

Prices last month grew by only 1 percent for already-built apartments, compared with 5.6 percent in March and 16.5 percent in the first quarter of the year, said Vladimir Smirnov, a spokesman for Miel. Figures for April were not immediately available, he said. Average prices have grown 24.3 percent in the first five months of 2008, Smirnov said.

"The rate has slowed," said Yekaterina Thain, director of residential property at Knight Frank. "This is primarily happening because supply is increasing. The supply is a little higher than in 2006 and 2007, and so this has slowed down prices a little bit."

Thain cautioned, however, that the rate is only slowing in comparison to 2006, a year of extreme increases in prices. "In the secondary market, the speed of growth has been higher in the first quarter of 2008 than in 2007," Thain said, adding that prices "will start to slow down" next year.

Alexander Ziminsky, director of the elite property department at Penny Lane Realty, said through a spokesman that the figures "demonstrate the traditional slowdown in growth during the summer."

Price gains for high-end real estate will slow from June to August and then pick up in the next three months, as people return from their dachas, he said.