Prices Drop For Cheaper Apartments

Prices for new apartments in Moscow in the standard and economy classes fell in August from the previous month, even as the overall cost the sector rose 4.1 percent, Miel Analytical Consulting Center said in a statement Monday.

"The average price for an apartment in a newly built, standard or economy-class residential building in Moscow in August fell compared with the levels for July by 2.3 percent and 9.3 percent, respectively," the statement said.

A jump in prices for business-class apartments, which rose 7.3 percent month on month, was responsible for the overall increase. The average price for such an apartment was 186,100 rubles ($7,270) per square meter last month, the statement said.

In new, standard apartments, the average price per square meter was 123,900 rubles in August and 99,000 rubles in economy-class buildings.

"In August on the Moscow market for apartments in new buildings we saw the highest jump for the summer period, which is tied to a change in the kinds of apartments being offered," Vladislav Lutskov, general director of the center, said in the statement.

"The share of offers in high-end apartments is rising, pushing out cheaper housing beyond the Moscow Ring Road," he said. A contributing factor was the 1.7 percent drop in the number of new apartments on sale, he added.

Complicating the picture was the fact that prices were not moving uniformly across the city, with an overall rise in prices in the most expensive region and a drop in the least expensive area.

The Central Administrative District -- traditionally the capital's priciest region -- saw an average rise of 13.9 percent for all apartment classes. The Southern Administrative District, which has generally had Moscow's least expensive real estate, saw prices decrease by 4.6 percent in the period.

Miel predicted in the statement that the number of new apartments being offered would continue to fall through the end of this year and that despite "the external conditions that are having a negative influence on the market," the falling supply would prevent prices from dropping.