The elite is slowly crawling outside the Central Administrative District – Newspaper Kommersant No. 142 (7343) of 08/06/2022

Despite restrained demand, an increase of almost 30% in average prices led to a new record in the turnover of the Moscow prime real estate market in terms of money. In the first half of 2022, sales increased by 18% to RUB 98.5 billion, and the second half of the year may be even more active. The consultants expect a 10% increase in demand by adjusting clients to the crisis and freeing up funds from deposits with higher rates. Most transactions with premium new buildings in Moscow are now outside the Central Administrative District.

According to the results of January-June 2022, 924 transactions were concluded in the primary premium real estate market of Moscow for a total of RUB 98.5 billion. Savills analysts cite such data in their study, indicating that in money terms, the market turnover exceeded the record value of last year by 18%. The dynamics is explained by the increase in housing prices. According to Savills, the average cost of premium real estate in a transaction increased by 29% over the year, to 1.03 million rubles. for 1 sq. m. Metrium Premium noted an increase in the average indicator in the elite segment by 7.1%, to 1.53 million rubles. for 1 sq. m. Knight Frank is talking about an increase of 9%, to 1.46 million rubles.

The number of transactions in the market of elite new buildings in the first half of the year decreased by 3%, according to Savills. Andrey Solovyov, regional director of the City Real Estate Department at Knight Frank, notes that in the face of uncertainty, many have taken a wait-and-see attitude, postponing the purchase of real estate for an indefinite period. “The doubling of the Central Bank rate in March and the high volatility of the ruble stimulated the transfer of savings to deposits, but their holders plan to enter into transactions in the short or medium term,” he points out. Apple Real Estate CEO Danila Savchenko adds that some potential buyers of high-budget real estate left Russia at the beginning of the current crisis.

Anna Radzhabova, director of the elite real estate department at Metrium Premium, explains the increase in the cost of premium real estate by a shortage of supply and an increase in the cost of work due to difficulties with the supply of imported materials. An additional factor in Savills is the negative expectations of market participants: developers include future risks in the sale price.

An important market trend is the shift of activity outside the central part of Moscow. According to Savills, in the first quarter, the CAO accounted for 47% (437) of the total number of transactions in physical terms and 68% in money terms (67.3 billion rubles), while a year earlier the figures were at the level of 68% and 73 .7% respectively. Outside the Central Administrative District, the number of transactions for the year increased by 61% in units and by 43% in money terms, the company calculated. Anatoly Dovgan, director of the market monitoring and evaluation department at Savills, explains this by the limited supply in the central part of the city and the price level. The average cost of high-budget new buildings within the Central Administrative District increased by 41% over the year, to RUB 1.2 million. for 1 sq. m, and outside the Central Administrative District – by 15%, up to 785 thousand rubles. for 1 sq. m.

Since spring, the overall development activity in the high-budget housing market has been gradually recovering. Anna Radzhabova estimates the current volume of supply at 5.2 thousand flats and suites, which is 59.1% higher than at the beginning of the year. The growth is largely due to the start of sales in eight new projects at once in May-June, she says. In the fall, AREA analysts are waiting for the launch of at least ten new projects on the market. And at the initial stages, a large volume of transactions is traditionally concluded, they indicate there.

Against this backdrop, Savills analysts expect to see a revival in the market in autumn and predict a 10% increase in demand. The shock of buyers has passed, many have decided on their strategies and are ready to solve housing issues, the company explains. An additional factor is the release of funds from deposits at favorable rates. Activity will drive prices up 5-10%, Savills predicts. Anna Radjabova also expects deferred demand for high-budget housing to be realized on the market.

Alexandra Mertsalova