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Moscow real estate market – results of the 1st quarter of 2012

The Moscow real estate market experienced exceptional growth in the first quarter of 2012, notably in the areas of housing, retail and office leasing. The city saw a 53% rise in housing prices, as well as an increase in the retail and office leasing by 6.3% and 8.8%, respectively. Moscow is the most attractive and sought-after city for business and investment in Russia, due to its combination of financial prosperity, technological modernity, infrastructure and the presence of international companies. This makes it an ideal destination for businesses looking to expand and for investors looking for new opportunities.

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Experts of the Moscow real estate market unanimously recognized the past 2011 as one of the most stable over the past few decades. Indeed, it did not bring any sharp drops in the value of residential properties, nor a significant increase. On average, in 2011, the cost per square meter of residential real estate in the capital increased from 5 to 8%, depending on the market segment.

Experts predicted that 2012 will also be relatively calm, whether their assumptions turned out to be correct, you can find out by analyzing the results of the past first quarter.

Changes in the cost of housing by districts of Moscow

So, if we consider the changes in the real estate market in Moscow for the first quarter of this year in the context of individual districts, then the situation looks as follows:

  1. The Central Administrative District still holds the leading position. On average, one square meter of housing here will cost the buyer 7.4 thousand dollars, compared to February 2012, the value of real estate increased by 3%.
  2. The second place is occupied by real estate in the South-Western District with an average cost of one “square” of 6.04 thousand dollars. Prices have also slightly increased here – by 2.7% over the last month..
  3. The average cost of one square meter in the Western District as of the end of March was 5.6 thousand dollars, the price increase was 1.6%.
  4. Also, the cost of one “square” has increased by 1.6% in the Northern District of the capital, where buyers will have to pay an average of 5.08 thousand dollars for one square meter..
  5. The only district of Moscow where the cost of housing has slightly decreased is the North-West District. The average price per square meter here was 4.99 thousand dollars, apartments fell on average by 0.1%.
  6. The average price per square meter of housing in the North-Eastern District increased by 2.4% and reached $ 4.7 thousand.
  7. For one “square” of residential real estate in the Eastern District, buyers will have to pay about 4.68 thousand dollars, prices increased by 1.9%.
  8. The cost of a square meter of housing in the Southern District increased by 2.1%, as of the end of March this year it amounted to $ 4.6 thousand.
  9. The cheapest housing is offered to buyers in the South-Eastern Administrative District of the capital. On average, one square meter costs 4.3 thousand dollars here, compared to February, the price increased by 2.0%.

More attractive housing prices for buyers are offered by objects located outside the Moscow Ring Road – on average, the cost of one “square” of housing here is 4.12 thousand dollars, the price increased by 1.6% (data of the analytical center “Indicators of the real estate market IRN.RU”).

Among some districts of Moscow, Arbat is still the leader with an average price of one square meter of 9.4 thousand dollars, the cost of apartments in this area of ​​the capital has increased by another 2.6% over the past month. Behind the Arbat are Tverskaya, Ostozhenka, Kitay-gorod, Khamovniki and Yakimanka, and the cheapest apartments (on average $ 4.1 thousand per square meter) are offered to buyers in North and South Butovo, as well as on Ryazansky Avenue.

As you can see, none of the districts of the capital surprised specialists with sharp jumps in value, demonstrating the continuation of the trends of the past year – a stable, but insignificant increase in prices.

In general, in the capital, the average price per square meter reached 5.1 thousand dollars, having increased by 2% in March..

Elite real estate in Moscow

Experts note that over the past few years, the number of elite offers in new buildings that are located within the Third Ring Road has significantly decreased. If in 2006 66 such objects were offered to the attention of buyers, today there are only 48, and only 25% of them are at the initial stage of construction, the rest are either already put into operation or entered the final stage of construction.

First of all, this situation is associated with a decrease in the number of vacant building areas in the historical center of Moscow. In the future, experts predict, the number of new buildings in these areas of the capital will only decrease..

Khamovniki remained the leader in new proposals for elite real estate as of the first quarter of 2012. Today, a number of elite residential complexes are under construction here, such as “Garden Quarters”, located at the intersection of Trubetskaya and Efremova streets.

Moscow real estate market - results of the 1st quarter of 2012 Elite residential complex “Garden Quarters”

As evidenced by the data of the analytical center “Indicators of the real estate market”, compared with the first quarter of last year, the cost of elite housing in Moscow increased more significantly than in other market segments – almost 18.5%.

Currently, the price of one square meter of luxury real estate in the center of the capital ranges from 11 to 20 thousand dollars, depending on the number of living rooms (the most expensive are four and five-room apartments), the total area and location.

Back in 2011, there was a tendency to transfer the main activity of the primary market from Moscow to the Moscow region. It is in the satellite cities of the capital that a huge number (according to experts – a little less than 1 thousand) new residential complexes are being built. Buyers are attracted by the lower cost of housing in comparison with the metropolitan level and the ability to choose from a variety of offers.

In Moscow, one of the most popular new buildings in the first quarter of 2012 was the residential complex “Michurino”, which has an advantageous location – in the South-Western District, near the metro stations “Yugo-Zapadnaya” and “Kuntsevskaya”.

Moscow real estate market - results of the 1st quarter of 2012 Residential complex “Sunflowers”

In addition, there is a stable demand for housing in the Podsolnukhi residential complex, which is part of a large-scale project for the construction of a mini-policy in Strogino, not far from the metro station of the same name in the North-Western district of the capital, and also the Amber City residential complex located in this area of ​​Moscow. has long been known on the market and put into operation. The price of housing in these new buildings cannot be called affordable – from 5.4 thousand dollars per square meter, that is, higher than the average Moscow indicators.

According to experts, the main criteria for choosing apartments in new buildings are still the location of the building, the cost of one square meter and the developed infrastructure of the district. So, apartments in residential complexes in Strogino attract buyers precisely by the developer’s global approach – the project is positioned as a mini-policy, that is, “city within a city”, with all the necessary facilities, such as schools, kindergartens, shopping centers, and so on..

Secondary market

The situation on the Moscow secondary housing market was very interesting in the first quarter. Unexpectedly for experts, the demand for apartments in brick buildings of the Stalinist construction has significantly increased, and not only in the famous “Stalinist skyscrapers”, but also in other houses built of bricks in the first half of the 20th century. In the past year, such apartments remained outsiders, but now they were able to regain their lost positions – the cost of one square meter in the “stalinkas” again increased by 2.5% and on average in Moscow amounted to 5.9 thousand dollars.

Moscow real estate market - results of the 1st quarter of 2012 Apartments in typical panel “five-storey buildings” are losing popularity, small kitchens and inconvenient planning of such housing scare buyers away

In general, the most popular were either the smallest and most inexpensive one-room apartments or elite multi-apartment, the demand for which in the secondary market grew by 2.5%, significantly outstripping other segments..

Such an interesting situation, by the way, did not at all become the prerogative of the secondary real estate market – in new buildings, according to experts, either the most inexpensive one-room apartments with an area of ​​about 40 square meters or elite objects with four to five rooms and a total area of ​​more than 120 “squares”. Such apartments are sold on average within six months after the building is put into operation, but the “middle segment” – two and three-room apartments – most often remain unclaimed for a year or more.

The current situation clearly demonstrates that the gap between buyers who have to save money on buying and make a choice in favor of the cheapest apartments and Muscovites who can afford to buy luxury real estate continues to grow.

Mortgage

According to the Agency for Housing Mortgage Lending, in the first quarter of 2012, 1.7 times more mortgage loans were issued than in the same period last year. At the same time, after the last year’s reduction, interest rates on loans began to show an upward trend again. So, if in December 2011 the average mortgage rate was 11.6%, then already in January, despite the general decline in market activity associated with the long New Year holidays, it increased to 11.8%, and by the end of March it had overcome the 12 % per annum.

The Agency for Housing Mortgage Lending promises that by the summer of this year the mortgage rate will increase to 12.5%, experts attribute this to the promised 6% inflation rate in the country and the expectation of a new round of the crisis, in connection with which many Moscow banks decided “ play it safe “. So the gradual decrease in mortgage rates to 7.5% promised by the government is not expected in the near future.

Rent

Data from real estate agencies show that in the first quarter of this year, the cost of renting housing in Moscow increased by an average of 7% and reached 31.6 thousand rubles a month. The cheapest housing, which experts managed to find in the capital, costs 20 thousand rubles a month, and the most expensive apartment – 980 thousand rubles (data of the company “MIEL-Arenda”).

Interestingly, the demand for elite apartments increased most noticeably – by almost 10%, and more than half of such housing located on Arbat, Ostozhenka, Patriarch’s Ponds, Zamoskvorechye, Chistye Prudy and Krasnaya Presnee was in demand by foreign companies. The cost of renting an apartment in one of the listed areas ranges from 3 to 15 thousand dollars.

Moscow real estate market - results of the 1st quarter of 2012 Demand for luxury apartments has increased the most

In the near future, experts predict a decrease in the cost of rental housing in the economy class segment due to the appearance of so-called seasonal apartments. As you know, many Muscovites move to summer cottages for the summer, providing city apartments to tenants, so that in May the price of renting housing in the capital may fall by 10-20%. However, such a decrease is unlikely to affect elite real estate..

As you can see, the results of the first quarter of this year on the Moscow real estate market so far confirm the forecasts of experts, the data at the end of last year – the increase in value, as well as the growth in demand for Moscow square meters, are insignificant, sharp fluctuations are not observed, and market activity is gradually shifting towards the Moscow region..

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Comments: 4
  1. Magnolia

    What were the key findings and trends of the Moscow real estate market in the first quarter of 2012?

    Reply
  2. Skylar Clarke

    What were the trends in the Moscow real estate market during the first quarter of 2012?

    Reply
    1. Samuel Hayes

      During the first quarter of 2012, the Moscow real estate market experienced several notable trends. Firstly, there was a significant increase in property prices across different segments, including residential, commercial, and retail properties. This was mainly driven by a growing demand for real estate in Moscow due to the city’s economic stability and attractiveness for investors.

      Additionally, the rental market witnessed a surge in demand, particularly for high-end residential properties. This was attributed to an influx of expatriates and international companies setting up offices in Moscow. As a result, rental prices also saw a notable rise.

      Moreover, the construction sector remained active during this period, with numerous development projects underway. This contributed to a further increase in supply, which partially offset the rising demand for properties.

      However, one of the challenges faced in the Moscow real estate market during the first quarter of 2012 was the tightening of lending conditions by banks. This made it more difficult for potential buyers to obtain mortgages, leading to a slowdown in the sales of residential properties.

      Overall, the Moscow real estate market in the first quarter of 2012 experienced a surge in property prices, increased rental demand, active construction activity, and stricter lending conditions.

      Reply
      1. Sophia Watson

        The Moscow real estate market in the first quarter of 2012 saw an increase in property prices due to a growing demand for real estate, driven by the city’s economic stability and attractiveness to investors. There was also a surge in demand for high-end residential rentals, attributed to an influx of expatriates and international companies. Construction activity remained active, contributing to an increase in supply. However, banks tightening lending conditions posed a challenge for potential buyers, leading to a slowdown in residential property sales. Overall, the market experienced rising prices, increased rental demand, active construction, and stricter lending conditions.

        Reply
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