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. Last Updated: 07/27/2016

Expats Have Own Apartment Agenda

MTPatriarch's Ponds, with its park, historical feel and rich choice of shops, is among the city's most prestigious areas.
Real estate prices may be a good indication of which Moscow neighborhoods are most desirable, but realtors say there is no accounting for taste.

Some parts of the city offer a combination of qualities that gives them a special appeal among high-earning expats, and realtors say these clients' preferences differ from rich Russians'.

Realtors agree that European expats' cultural awareness is a factor in their choice of neighborhood, putting Patriarch's Ponds at the top of their house-hunting list.

Russian clients, on the other hand, put Ostozhenka in first place, followed by Patriarch's Ponds, Arbat, Khamovniki and Tverskaya locations, according to Blackwood real estate agency. Foreigners do not fancy Khamovniki because it is outside the Garden Ring but still pricy, Intermark Real Estate said.

Expats' particular concerns include the legal transparency of their housing arrangements and the quality of the neighbors. Russians, on the other hand, are more concerned about the ecology of their neighborhood. They are prepared to live farther from their workplace in a cleaner area, while foreigners prefer residences close to their work.

For some elite expat clients, the most important thing is a good view -- with the most sought-after views being the Kremlin, the Moscow River and Christ the Savior Cathedral, said Marina Chernova of West-Pro Realty.

Ultimately marital status and children are the factors that decide an expat's choice of neighborhood, real estate agents say. The young and single choose apartments in the historical center, close to their work with good transport links. Those who are married prefer living in freestanding houses with easy access to their children's school, either inside or outside the city boundaries.

In general, Moscow's most sought-after addresses are the central streets west of the Kremlin within the Garden Ring, such as Prechistenka and Ostozhenka, Patriarch's Ponds, Arbat, and side streets off Tverskaya, such as Kamergersky, Bryusov, Glinishchevsky and Kozitsky lanes. Addresses on the "Golden Mile" -- Ulitsa Ostozhenka -- are particularly popular and are thought to convey an image of respectability.

The second-tier locations are considered to be those within walking distance of Frunzenskaya Naberezhnaya, Chistiye Prudy, Tsvetnoi Bulvar and Smolenskaya Naberezhnaya, according to Penny Lane Realty.

Moscow River embankments are popular not only because of the large Stalin-era apartments but also because of the gorgeous views and lack of traffic jams.

All agents interviewed said that nationality strongly affected their client's preferences. The French look for apartments at Chistiye Prudy and Kitai-Gorod because of the proximity to the French school. Germans and Scandinavians seek homes near the German and Scandinavian schools in the city's southwest. Britons and North Americans seek residences on Leningradskoye Shosse, Khoroshevkoye Shosse, Serebryany Bor and the suburban housing estates Rosinka and Pokrovsky Hills because of their proximity to the British International School and Anglo-American School. The rent in these neighborhoods is not cheap, but there is no shortage of expats apartment-hunting in the higher price bracket, realtors say.

Igor Gerasimov of Penny Lane estimated about 3,000 expats move to Moscow annually, while another 4,000 already here look to move within the city. Eighty percent of the expats seeking an apartment in the most sought-after neighborhoods are executives of multinational corporations, diplomats or other foreign government employees.

Although prices for top-end apartments start at $2,000 per month, a high-ranking expat's housing allowance is about $5,000 per month -- and many are ready to fork out another $500 or $600 from their own pocket to get a good location and extras such as a view and security, said Alfia Zakirova of Usadba Real Estate.

Russian landlords still prefer foreigners to Russian nationals, real estate agents said. Among the most wanted tenants are those from Western Europe and North America.

"They still remember New Russians who had lots of money one day and no money to pay the rent the next day," Zakirova said. "Foreigners also treat other people's property with more respect."

She added that Americans coming to Russia brought with them a tradition of writing down small details of the rental agreement "and behaving properly."

The notoriously problematic procedure of registration for foreign tenants is not a problem in premium-sector apartments, agents said.

"Since tenants' companies pay via bank transfer, they insist on signing a contract," Zakirova said. "Landlords usually register as individual entrepreneurs and pay income tax as low as 6 percent."

Another trend is the increasing number of foreign landlords, as expats have caught on to this lucrative investment opportunity. According to estimates by Usadba, the proportion of expat landlords in the housing market has grown from 1.5 percent to 6 percent in recent years, with annual growth for rent in the premium apartments around 15 percent.