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. Last Updated: 07/27/2016

Housing Market Expected to Tighten in 2000




After a year of falling real-estate prices, local realtors say they have observed slight increases in December and January as demand for new housing has increased. Nevertheless, they predict new-housing prices will remain stable throughout the first half of the year.


Prices on new construction fell an average of 37 percent over 1999, although a slight rise was observable in December, said analysts from the SAVA real estate agency. Representatives from the Moscow Central Realty Exchange said that price spurt continued on into January, sending prices up by as much as 10 percent to 15 percent.


Last year's drop in prices varied by region. Butovo, south of Moscow, was hit hardest with a drop of 51 percent last year. In Zhulebino, to the east of Moscow, prices dropped by only 18 percent - however, nearly no new housing has gone up there in the last year.


"Demand in Butovo is very weak," said Andrei Kupriyanov, marketing director for the Inkom corporation.


Access to public transportation plays a important role in making Zhulebino so attractive. "Although the region is far from the metro, its ecologically good location continues to attract buyers," said Yelena Dranchenko, president of the Moscow Realtors Guild and general director of the Yenisei construction company.


Zhulebino and Novokosino, to the east of Moscow, are nearly saturated with new housing, while construction is nearing completion in South Butovo.


The city of Moscow has nearly no housing reserves, Deputy Mayor Vladimir Resin - also deputy director of municipal construction - reported to a Moscow government hearing earlier this month. To meet perceived demand, the Moscow government has called for 3.5 million square meters of housing to be built in the capital by the end of 2000.


Realtors say they have observed rising apartment prices even in the Maryino region, one of the least expensive areas in Moscow. In spite of the ecological problems associated with industrial activity in neighboring Kapotnya, buyers are attracted by planned construction of two new metro stations.


Access to transportation is often a decisive factor for consumers.


Similar deficiencies can be found in nearby Brateyevo, but according to Drachenko of the Moscow Realtors Guild, its greater distance from the metro immediately reduces demand for apartments there. However, consumer interest is warming up in both Maryino (especially in Maryino Park) and Brateyevo, said Inkom's Kupriyanov.


He attributed the increased interest there to the use of new technology like monolithic construction, which enhances heat conservation. With fewer supporting walls, it also lends flexibility to internal apartment layouts without raising construction costs.


"In the last few months, people have been very interested in apartments of the new P44T and P44M building series that the First Housing Construction Combine has started building," said Irina Bezrukova, head of new construction at the Moscow Central Realty Exchange. "They have 13.5 square meters of kitchen space, and their exteriors are very attractive."


Many Moscow apartments have considerably smaller kitchens, with 10 square meters or less all too common.


According to Kupriyanov, quality is second to price in determining consumer demand, but other analysts said location is just as important.


Representatives of the Miel real-estate agency cite consistent demand for the wide price range in the Mitino region in the north of Moscow.


Miel reports: their Mitino apartments in block-construction buildings sell for $490 to $550 per square meter; units in improved construction buildings sell for $490 to $600 per square meter; and those in brick buildings with fewer stories sell for $660 to $895 per square meter.


Cheaper rates are available for pre-buying planned apartments, said Bezrukova of the Moscow Central Realty Exchange.


Planned apartments can go for as low as $410 to $420 per square meter for prefabricated units, and $480 to $500 per square meter for those already in construction.


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Average Prices in January for Mass Housing Program Apartments


Area Typical Apartment Above Average Apartment


(city section) $/square meter $/square meter


Brateyevo (south) 378 508


Marino, Lyublino (southeast) 392 434


Mitino (north) 464 508


Novokosino (east) 488 n.a.


Yuzhnoye Butovo (south) 400 447


Zhulebino (east) 392 515


SOURCES: Inkom, Miel, Moscow Central Realty Exchange.