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. Last Updated: 07/27/2016

Expats Spurn Pricey Rentals in ’09

Elite apartment rentals have become much less popular among foreigners this year, while demand for luxury apartments by Russian clients has tripled, according to a report released Monday.

“The share of foreign clients decreased 18 percent, however, as before they constitute the majority of total demand,” IntermarkSavills said in a report.

The number of Russian tenants in elite housing jumped 250 percent in the first nine months of the year and accounted for 30 percent of the total rentals in the sector, compared with 9 percent in the same period last year. The number tenants from the Commonwealth of Independent States did not change.

The decrease in the number of foreign tenants is a direct consequence of the recession that hit the Russian economy, said Oleg Repchenko, head of real estate web site

“Many foreign companies shrank their activity and cut their expenses on top managers,” he said. “Besides, there was a big outflow of expat top managers in 2009, so this is why their share in elite rentals fell so drastically.”

The most expensive properties (starting at $10,000 per month) are still in high demand, the report said. But the number of clients who can afford such properties fell 50 percent and now constitutes approximately 9 percent of the total number of applicants.

The three most popular districts for elite rentals remained the same as last year: Centrally located Arbat-Kropotkinskaya, Tverskaya-Kremlin and Patriarch’s Ponds are still heavily in demand, the report said, adding that Zamoskvorechye, Lubyanka-Kitai-Gorod and Leningradsky Prospekt are also popular regions.

Interest in properties in the Leningradsky Prospekt area decreased about 50 percent, the report said.

Demand for apartments in the elite rental market rose throughout 2009 and increased 7 percent compared with the same period in 2008.

“This demonstrates that the elite rental market remains stable and firm even in the crisis period,” the report said. “Along with this trend … the volume of demand grew due to the number of tenants who wanted to improve their housing conditions and to rent a better apartment.”