Recommendation points
Back in November last year, the media reported information provided by Penny Lane Realty, which estimated that more than 60% of all elite apartments in the center of Moscow are purchased by officials.
According to Alexei Ziminsky, director of the company’s city real estate department, we are talking primarily about federal officials. The goals for buying apartments were completely different – investing in the future, as a second apartment closer to work, for permanent residence, and even as a gift to family and friends.
In the fall, the demand for luxury apartments dropped significantly precisely because the main buyers – officials – were afraid to spend on the eve of the elections, experts at Penny Lane Realty emphasize. And on the contrary, now that the political situation is more or less clear, the demand has increased sharply.
At the beginning of the summer, another study by Soho Estate was published, which analyzes the market for sales of luxury suburban real estate in the Moscow region. And again, the main buyers of luxurious mansions near Moscow turned out to be the heads of state companies and officials.
Does elite Moscow and suburban real estate become a real special offer for government officials? Do the official income allow them to acquire such expensive objects? However, the last question even sounds ridiculous, but nevertheless, in the light of the numbers, the situation looks more understandable, so let’s try to figure it out.
Buyer image
Soho Estate even created an image of such an average buyer of luxury real estate in Moscow and the region. In the overwhelming majority of cases, this is a man between the ages of 40 and 60, holding a fairly high position of a top manager of a state company or an official in the federal government or city hall.
It is interesting that such buyers prefer classic-style mansions with colonnades, balustrades and English windows, as well as solid, solid interiors. Their motto can be called “respectability in everything”, so fashion trends, minimalism and other modern styles leave such buyers indifferent.
But officials prefer to use exclusively natural materials in the decoration of their apartments and houses, paying tribute to the desire for environmental cleanliness and naturalness. However, perhaps they are simply worried about their health and are trying to surround themselves with things created from materials not of the chemical industry, but of nature itself?
Another important detail is that officials try not to advertise their acquisitions of luxury apartments and cottages. And for whatever purpose the real estate was purchased, it is usually issued to relatives, and not the main buyer.
Average income
It is quite simple to find out about the official income of officials and heads of state corporations – you just have to go to the Rosstat website and study the detailed reports presented there on the latest changes in the wages of workers of a particular ministry and department. State corporations also regularly publish data on changes in the income of their directors and top managers – this is not at all secret information, because the salary is official.
So, according to Rosstat data, the average monthly wages of employees in federal state bodies of Russia for the first three months of 2012 increased by 12.8% compared to the same period last year and amounted to 51.6 thousand rubles. Very modest, although an ordinary Russian pensioner would not say so.
Meanwhile, Rosstat dryly reports that in most federal ministries and departments – in 85.7% of central administrations, wages are lower than the average income of Muscovites.
The employees of the Presidential Administration of Russia receive a little more than average – 95.548 rubles. The salary of employees of the Federation Council reaches 58.462 thousand rubles.
The average salary of employees of the State Duma was only 46,069 thousand rubles. True, on a quarterly basis, deputies receive a bonus in the amount of average earnings, and newcomers also receive “lifting” in the amount of about 9 thousand rubles for each family member.
The average salary of civil servants in the apparatus of the government of the Russian Federation reaches 104.28 thousand rubles.
Employees of the Federal Antimonopoly Service receive the least amount – 32.831 thousand rubles, as well as employees of the Federal Service for Financial Markets of Russia – only 28.678 thousand rubles. As you can see, the government decided to save money on anti-monopoly agents and financiers..
Higher salaries for employees of the Ministry of Emergency Situations – 101,773 thousand rubles, and in the Ministry of Defense the average salary is 56,208 thousand rubles.
As for the top managers of state corporations, their official income increased by 20-30% in comparison with 2011. The exact figures have not been disclosed, the heads of state-owned companies modestly state that the salaries of directors and senior managers depend on the results of the enterprise itself and can range from $ 300,000 to $ 8 million per year. It is known that last year the members of the Gazprom Neft Management Board – 10 lucky ones – received $ 22 million each.
Interestingly, since 2012, Dmitry Medvedev, the former president and now the prime minister of Russia, has obliged the heads of state corporations and companies, as well as the heads of joint-stock companies, in which the state’s share is at least 25%, to report their income.
The heads of companies and corporations with state participation fulfilled the order of the leader of the country and filled out the income declarations for 2011, but these data were not made public.
The only one who made his income public is Anatoly Chubais, the head of Rusnano, who received 260.1 million rubles last year. Moreover, the main part of the income of the author of the voucher privatization was received from the sale of part of a plot of land in the Tver region – the transaction amount was 135.6 million rubles.
Of course, it should be borne in mind that besides the official salary, officials receive a number of benefits and privileges and can count on government assistance. For example, several high-level officials from the Ministry of Finance and the Ministry of Economic Development received a one-time subsidy from the state for the purchase of housing last year. This subsidy is calculated on the basis of the established standards for the area per person and can be increased by the decision of the head of the ministry, depending on the length of service of the employee. The average size of such a subsidy was, as explained in the ministries, 20 million rubles, which is quite enough to purchase a completely comfortable apartment in Moscow. However, is this subsidy enough to buy an elite mansion or an apartment in a prestigious building??
Property price
According to Penny Lane Realty, the most popular elite real estate among officials are apartments in the historic center, usually in club-type houses, in quiet corners not far from Patriarch’s Ponds, Tverskaya and Arbat.
Recently, the interest of buyers of elite apartments has clearly shifted from the pretentious “Golden Mile” towards more modest-looking, but very cozy old-built mansions that have been restored and have become Club Houses.
Another area that attracts the attention of buyers of the “elite” is Khamovniki, with its abundance of new buildings and developed infrastructure.
The average price of one square meter of Moscow elite real estate at the beginning of the summer of this year was set at $ 24,980; on average, buyers paid $ 2-3 million for an apartment with an area of 100 to 150 square meters. For club-type houses, the transaction amount rises to $ 8 million. It is cheaper to buy apartments in new residential complexes of Khamovniki – from 15 thousand dollars per “square”.
The cost of suburban real estate is certainly lower, however, the area of the mansions themselves and land plots is much larger. So, on average, one square meter in a suburban elite cottage costs buyers $ 5.1 thousand, so a “house” with an area of one thousand square meters – quite an average size for buildings in this segment of the real estate market – can reach $ 50 million. On average, an elite house in the near Moscow region costs buyers $ 24 million.
The most popular direction is Novorizhskoe shosse, closed villages with manor-type houses – Blizhnee Pokrovskoe, Novakhovo – Dvoryanskoe Gnezdo, Idyllia, Monolit Residences, Usovo Estate and Park Villas are in high demand. The maximum area of a house sold this year is 1.9 thousand “squares”, the area of land plots can reach 60 acres.
So, let’s imagine that an ordinary State Duma deputy or an employee of the Federation Council decided to buy himself an elite apartment. With his average official salary of 46 and 56 thousand rubles (1,415 and 1,723 dollars) per month, respectively, it will take at least 100 years to save up for such a purchase! And this is taking into account the fact that all salaries will be completely postponed, and the official’s family will have to live on other incomes, for example, the salary of his wife.
Top managers of state-owned companies certainly have more opportunities and higher incomes. But, if, according to the data of Contact Real Estate analysts, 250 elite apartments in the center of the capital were sold this year, it is easy to calculate that 60% of this figure, that is, the share of officials will be 150 apartments. And there are far fewer board members of large companies.
It is very difficult to answer the logical question – “and what to do?”, Because “they are completely insolent” and “the country is being plundered”. An appeal to the authorities – “have a conscience” – is not an option. Interesting in this light is the recent decision of the British Parliament, which significantly increased taxes on the purchase of expensive luxury real estate in England. If the cost of a mansion exceeds 2 million pounds sterling (about 2.4 million euros), then the amount of tax rises to an incredible figure of 7%, that is, the amount of tax can be 150 thousand pounds.
And the most interesting thing is that for offshore companies the tax on the purchase of luxury real estate in Great Britain was raised to 15%. Apparently, the British parliament is well aware of statistics showing that through offshore companies Russian oligarchs and officials acquire about 3,000 apartments worth at least 2 million pounds in London a year. According to experts, in particular Igor Indriksons, who manages real estate investments, this can completely discourage officials from buying expensive apartments in the English capital – losing such sums on taxes that previously did not exceed 4% of the transaction amount would be at least unpleasant.
This option would work in Russian realities – it is not known, but other proposals, for example, to strictly control the income and expenses of officials, to fight corruption with the usual methods, look even more ineffective.
Is elite housing exclusively available to government officials or is it open to the general public as well?