News in Brief
- Mar. 11 2013 18:06
Vladimir Filonov / MT
Residential Market Edges Higher after Moscow Doubles its Territory
By Irina Filatova and Mark Gay, The Moscow Times
A new dynamic has emerged in the secondary market since the end of 2012. While the Russian mass market is focused solely on price, and pursuing cheaper homes regardless of quality, this has started to impact more expensive districts, according to Dmitry Taganov, Head of Real Estate Analysis at INKOM.
"The market has slowly started reacting to the demand of the mass customer who is oriented upon buying cheap and not always quality accommodation. So demand for economy class flats is rising while interest in expensive residences is falling which, of course, affects prices," Taganov said. In January the cost of a square meter in the central district fell by 0.3 percent. Flats in brick Stalin buildings cheapened by 0.5 percent. The general fall in prices across the premium sector was 0.2 percent.
As the secondary market in the central district declined, prices per square meter in all districts except for the center rose, by between 0.2 and 0.6 percent. The least popular area remains the north west. The volume of homes on the market inside the Moscow ring road as of the end of January was 42,600. Of these, 19 percent were in the central district, 14 percent in the western districts, with other sales distributed fairly evenly across the city.
In terms of price range, 42 percent were in the price category of 5 to 10 million rubles or between $167,000 and $334,000.á The most widely offered apartments are in panel buildings, 43 percent, followed by brick, 28 percent.
The distribution of apartments by size is: two-room, 32 percent; three-room, 32 percent; single room, 21 percent; and four plus, 16 percent.
Growing housing stock caused byáMoscow's territorial expansion resulted ináthe city seeing anáincrease ináthe number ofádeals involving existing residential properties last year, analysts saidáMonday.
Theánumber ofásold andápurchased properties increased byá6 percent iná2012 year-on-year toá96,600 items, according toáthe Federal Service foráState Registration, Cadaster andáCartography. This growth rate is likely toácontinue this year unless there is aánegative effect fromáthe volatility onáexternal markets facing theádebt crisis, analysts said.
Theánatural demand foráMoscow housing boosted the number ofádeals ináthe first half ofá2012 byá5.1 percent fromáthe same period aáyear earlier, according toáreal estate agents MIEL. But theá6.7 percent growth ináthe second half resulted primarily fromáthe increase ináthe capital's housing stock after its area more than doubled inásize, theácompany said ináa statement.
Theánumber ofádeals is likely toáremain atáthe same level this year, said Alexei Shlenov, chief executive ofáMIEL's real estate brokerage unit. However, theágrowing affordability ofámortgages might stimulate buyers' activity this year if mortgage rates remain unchanged, Shlenov said. Mortgage rates averaged 12.5 percent as ofáthe end ofálast year. Theánumber ofámortgage deals has been growing since the start of the crisis, increasing fromá7 toá8 percent ofáall housing deals iná2009 toáabout 30 percent last year. á
This year's growth is expected toábe primarily ofáa technical nature, as theáhousing stock onáthe recently annexed territories expanded theásupply, said INKOM's Taganov.
As aáresult ofáthe Kremlin's initiative, 148,000 hectares ofáMoscow region land toáthe south andásouthwest ofáthe city were added toáMoscow onáJuly 1 last year. áBut increasing buyers' activity is unlikely toáaffect prices significantly, with analysts expecting aámoderate growth ofáabout 6 percent this year. Prices foráexisting housing ináMoscow increased byá3.8 percent iná2012 toáaverage 173,200 rubles ($5,248) per square meter, Taganov said.
Moscow City Drives Increase in Office Volume
Projects in Moscow City will account for almost 40 percent of the stock on course for delivery in 2013. These include the Eurasia Tower and Mercury Tower. Cushman & Wakefield expects about 600,000 square meters of office space to be delivered in total this year. According to the same research, tenants leased more than two million square meters of office space in Moscow in 2012, slowing towards the end of the year but still ahead of 2011.
New 5-Star Hotel to Boost the Luxury Sector
Vienna International Hotelmanagement AG will open the Astrum luxury hotel in Shelkovo near Moscow at the end of 2013. The owner of the property is Shelkowskij Holding. Combining a 3,400 square meters spa and a 1,900 square meters conference area, the hotel is aimed at the wellness holidays and conference segment.
The newest hotel in the greater Moscow region is being built on 27 floors in Shelkovo, about 20 km from the Russian capital, in an urban agglomeration with a population of 1 million.