Review of the market of new buildings in Moscow and the Moscow region at the end of March 2011

Recommendation points

• General dynamics of housing prices in the capital
• The market for new housing in Moscow and the Moscow region maintains general trends towards a slight rise in price
• Several new projects have been added to the offer of new buildings in Moscow
• In the Moscow region, the number of sales of new apartments has sharply increased
• What awaits us in the near future

The end of March 2011 only confirmed the predictions of most experts that at present real estate in Moscow is not ready to rise in price. Despite the general improvement in the economic situation in the country, rather high oil prices and the ongoing talk about the shortage of apartments, the cost per square meter on the Moscow housing market in the midst of the spring season practically remained in place.

Sharlovsky Arkady. New buildings. 2009

Price fluctuations do not occur even due to seasonal factors. Experts note that now the capital’s real estate market is growing in volume, not in price.

General dynamics of housing prices in the capital

The dollar index of the cost of housing published by the analytical center “Indicators of the real estate market” in March rose by 1.7%, from 4,573 to 4,649 points. However, this growth was most likely due to the fall of the dollar against the Russian ruble, which amounted to 2.9% over the month. Ruble housing prices in Moscow, according to statistics, on average, are still holding at the level of 135 thousand rubles per square meter..

The dynamics of prices for apartments in the capital by type of housing in March was more balanced than in February. Thus, the increase in prices for apartments in different types of buildings was approximately the same (from 1.6% to 1.9%). Only apartments in modern monolithic-brick buildings lag behind these indicators – plus 1.1%. The dynamics of prices by type of apartments is also stable. In March, the increase in prices for 1-room and 3-room apartments was 1.5%, 2-room and multi-room apartments rose by 1.7%.

Consequently, prices are stabilizing in the Moscow housing market..

A similar balanced dynamics of prices is observed in the districts and districts of Moscow. In the districts, for example, the leaders are the South-Eastern Administrative District, the North-Eastern Administrative District and the Southern-Western Administrative District, the North-Western Administrative District, the Northern Administrative District and the Joint-Stock Company.

The market for new housing in Moscow and the Moscow region maintains general trends towards a slight rise in price

On the market of new buildings in March, there was also a slight increase in the price for 1 sq. M of living space in dollar terms. This is also due to the fall in the dollar against the ruble. However, some developers still set housing prices in dollar terms; therefore, the dynamics of ruble prices for new housing in the capital in the period under review was characterized by a slight drop. However, the general trend over the last half of the year is characterized by a gradual increase in prices in both currencies..

The average ruble price for 1 square meter in new houses was about 156 thousand rubles. The overall growth over the past 6 months was 2.6%. The dollar price per square meter was at the level of $ 5,477 – an increase of 10.9%.

Bitkin Evgeniy. Winter Moscow (fragment). 1969

In the opinion of most experts, this situation with price stabilization and the absence of sharp jumps is due to the fact that after the economic crisis, the housing market is now not in demand for investment, but in real potential buyers of apartments. And on ordinary people, neither oil prices nor the flow of money into the country’s economy have a serious impact..

According to the center “Peresvet-Invest”, in March 2011 the average price per 1 sq. M. m in the primary housing market in the Moscow region amounted to $ 2,255 or 64,278 rubles per sq. m. In the period under review, the dollar price increased only 0.6%, while due to the fall in the dollar exchange rate, ruble prices decreased by 1.1%.

The price per square meter in dollars compared to December 2010 increased by 6.5%, while in rubles it fell by 0.5%. In the first quarter of this year, the price per square meter in the Moscow region increased, both in dollars and in rubles – by 6.7% and 0.9%, respectively.

Several new projects have been added to the offer of new buildings in Moscow

In March of this year, according to the analytical center of the NDV-Real Estate company, the supply of apartments in new buildings in the capital’s real estate market increased by 10.2%.

Among the supply of new buildings, 77.4% falls on objects that have already been commissioned or those that are planned to be commissioned before the end of this year.

Also in March, several new large-scale projects entered the capital market of new buildings, which led to a noticeable increase in apartments offered for sale..

Compared to February 2011, the share of supply of apartments in panel houses has increased in the housing market. Nevertheless, 87% of the total supply of new apartments still falls on housing in monolithic and monolithic-brick buildings..

The aggregate level of demand for new housing increased by 10%.

The largest share (49%) in the supply structure in the capital market of new buildings fell on the price segment from 100 thousand to 150 thousand rubles per sq.m. The price range from 150 thousand to 200 thousand rubles per square meter accounted for 36% of the total supply. The price segment from 200 thousand to 250 thousand rubles per square meter made up 10% of the total supply. And only 5% fell on the most affordable apartments worth up to 100 thousand rubles per square meter..

If we consider the demand for new housing, then its structure in March, compared to February, did not change significantly. The aggregate level of demand for new housing increased by 10%.

Like last month, one-room apartments have become the most popular. The share of demand for them was 49%. The second place was taken by two-room apartments – 36%. Three-room and other multi-room apartments accounted for 14% and 1% of total demand, respectively.

In the Moscow region, the number of sales of new apartments has sharply increased

In March, the demand for apartments in cities near Moscow exceeded even the most optimistic expectations of experts. The most popular were relatively inexpensive cities with developed infrastructure in the south of the Moscow region. The reason is that it is here that in the near future it is planned to open new metro stations, which will significantly increase the transport accessibility of this region..

According to the real estate company “Peresvet-Invest”, the number of sales in new buildings in the Moscow region in March, compared to February, increased almost 3 times. A significant increase in demand was noted in Lyubertsy. Real estate in this area cannot be called cheap, however, high transport accessibility, a sufficient supply of new properties, as well as a well-developed social infrastructure, which is in no way inferior to the neighboring districts of Moscow, significantly stimulates demand from potential buyers.

Yashin Pavel Mikhailovich. New area. 1970s

In March 2011, the level of demand in the new housing market in the Moscow region increased by 27.6%. Even the average daily rate increased by 10.2%. In relation to last year’s level, demand increased by more than a third – by 34.8%.

Some experts suggest that the coming year will be characterized by a rapid positive dynamics of demand for the Moscow Region housing market and, possibly, will very soon begin to approach the pre-crisis level. This development scenario will be facilitated by a noticeably stabilized general macroeconomic situation and a fairly moderate rise in prices in this region compared to expensive housing in Moscow..

The number of new buildings, which were put up for sale in the Moscow region market in March, decreased by 1.5% and amounted to only 665 objects. This decrease in the number of houses on offer is due to the fact that the sale of apartments in houses that were put into operation at the end of 2010 have already been completed. Compared to December 2010, the number of objects decreased by 13.3%. In 2010, the number of new buildings in the Moscow region increased by 13.7%.

Nevertheless, this year, especially in its second half, a decrease in the number of new properties that are on the open market is forecasted. This will be facilitated by the full implementation of apartments in already commissioned houses..

The number of new apartments for sale in the Moscow region in March 2011 increased by 12.4%, and amounted to 25,972 pieces. Compared to March 2010, the supply of new buildings has almost doubled. Such a large growth is determined by the launch of new projects on the market, and the scale of the projects themselves. Currently, many complex development projects are being implemented on the market. Compared to December last year, the number of apartments for sale increased by a quarter – by 25.2%.

What awaits us in the near future

According to experts, real estate in the capital will not rise sharply in the very near future. This is due to the fact that effective demand for housing in Moscow is still quite limited. This is despite the fact that the cost of an apartment, as a rule, exceeds the income of the majority of the population..

In the coming year, most likely inexpensive, but high-quality economy-class housing may rise in price. The remaining segments of the housing market in the capital, in particular, luxury apartments, business class housing and townhouses, are likely to remain in their positions..

The price of apartments both in Moscow and in the near Moscow region will have a rather serious impact on the dynamics of the exchange rate of the national currency in relation to the US dollar.

The growth in supply and demand observed in March 2011 in the market for new buildings indicates a significant increase in activity among potential buyers. In the very near future, further dynamic market development, characteristic of the period under review, is likely to continue..

It should also be noted that, despite the general forecast of stabilization of housing prices in Moscow, some experts believe that 2011 will be characterized by further growth in the price of new housing in the Moscow region. The total price increase, according to some forecasts, may reach 12-17% by the end of the year.