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. Last Updated: 07/27/2016

Demand for Apartments Up, Firms Say

Don’t wait for Moscow apartment prices to fall any further — it’s better to buy now, First Deputy Mayor Vladimir Resin said. But the only apartments being snapped up are the ones offered at a deep discount to their asking price.

“Whoever has free cash should buy now, rather than wait for apartment prices to become cheaper,” Resin said.

The recession has already sent apartment prices plummeting, and those who wait risk missing the boat on good deals, he said.

Apartment prices in Moscow have fallen 37 percent in dollar terms to $3,860 per square meter, and 25 percent in rubles, to 118,579 per square meter.

As an example, Resin cited the Marfino residential development, a complex being built by Vedis Group in northeastern Moscow. Last month, a Vedomosti reporter who visited the complex’s sales office was offered several one-room apartments at a price of 3.8 million rubles ($125,000) each in buildings that were still under construction. The company announced Sunday that all apartments in completed buildings had been sold, and one-room apartments are now only available in buildings where interior construction has just begun.  

Vedis Group refused to comment for this story.

PIK Group is also seeing a rise in apartment sales, company head Pavel Poselenov said.

“We saw a steady growth in demand starting this summer. Right now, demand for apartments is significantly greater than it was in the first half of the year, although it still has not reached precrisis levels,” he said, Reuters reported.

The jump in sales is because of a large number of apartments that were completed and ready for sale at the beginning of the summer, Poselenov said.

In June, City Hall terminated a contract with PIK and returned to the company almost 500 apartments in Khimki with a total area of 35,500 square meters, as well as over 80 apartments with a total area of over 5,200 square meters in Dolgoprudny.

PIK would not say what percentage of those apartments has been sold.

A source at PIK, who asked that his identity be withheld, said half of the Khimki apartments had been sold.

PIK’s sales office said only two three-bedroom apartments were left in Dolgoprudny.

The numbers are impressive when compared with data from six months ago. Last winter saw sales of new apartments drop by 76 percent from the same time in 2008, according to the Doki real estate agency. PIK said sales at the company had fallen by 90 percent. The number of deals in the secondary market fell by 36 percent in the fourth quarter, while the number of mortgage deals dropped by 26 percent. The biggest drop occurred in February, when 47 percent less deals were registered than during the same time last year.

The market did not crash, as some investors had anticipated, and the demand for housing did not decrease, said Nadezhda Kosaryova, president of the Institute for Urban Economics.

Most of the deals are taking place in the economy-class sector and involve properties that have been competitively priced, said Grigory Poltorak, president of Best Nedvizhimost.

In Marfino, where Resin said 20 apartments are sold daily, the average price for housing is 85,000 rubles per square meter — almost 33 percent cheaper than apartments in the rest of the city.

PIK had to lower their prices as well, with the average price for the company’s Khimki apartments falling 6.25 percent since the beginning of the summer to 75,000 rubles per square meter, and Dolgoprudny apartments dropping by 14.3 percent to 60,000 rubles per square meter.

Other companies also noted a growth in demand, although none were ready to provide statistics for exactly how many apartments they had sold.

“In the first two weeks of September, the company sold 20 percent more apartments than it did in all of August,” said Tatyana Reshnyak, general director of Glavmostroi Nedvizhimost.

Apartment sales took off in August, setting a crisis record and even eclipsing sales in August 2008, said Nikolai Rumyantsev, director of residential real estate at Inteko. A lack of new buildings will make itself felt next year, making a rise in prices unavoidable, he said.