The situation on the rental housing market in October 2023

Due to a sharp reduction in the volume of rental exposure after a wave of seasonal demand, average rates continue to rise: one-room apartments increased in price by an average of 1% over the month, two-room apartments by 10%. But due to fluctuations in the supply structure, the dynamics vary markedly across cities. Now demand is declining, and analysts mainly expect average prices to decline by 5–7% over the next few months. Although it is possible that the rental market may be supported by clients who have temporarily refused to buy their own home.

The average cost of renting one-room apartments in the largest regional markets in Russia (16 cities with a population of over a million, Moscow and Leningrad regions) at the beginning of October amounted to 26.2 thousand rubles. per month, increasing by 1.2% by the beginning of September. Over the same period, two-room apartments rose in price by 10%, to 37.2 thousand rubles. per month. Such data is provided in Cyan.Analytics. According to Etazhi’s calculations, the average cost of renting one-room apartments in 16 largest cities at the beginning of October was 23 thousand rubles. per month, two-room apartments – 27.9 thousand rubles. Over the month, the figures increased by 3.4% and 3.6%, respectively. In Avito Real Estate, the average housing rental rate in Russia as a whole is estimated at 29 thousand rubles. per month. By the beginning of September, the value increased by 7.4%.

Olga Pavlinova, director of the Etazhi rental department, associates the pronounced dynamics of average prices with high seasonal demand and a shortage of budget supply: inexpensive options left the market in late August-early September.

The head of the long-term rental category of Avito Real Estate, Konstantin Kamenev, notes that the total number of available offers decreased by 10.3% per month, the dynamics in cities with a population of over a million is more pronounced – minus 16.8%.

The only exception, according to the expert, was Kazan, where the exposure increased by 2.6%. The head of Cyan.Analytics, Alexey Popov, adds that because of this, the dynamics of rates differ greatly depending on the city: “there are many times fewer apartments on display than usual: for example, in Chelyabinsk there are now not several hundred, but 37 two-room lots available” .

The most pronounced price increase for one-room apartments per month in “Cyan.Analyst” note in Ufa: the average rate increased by 11%, to 20.8 thousand rubles. per month. In Novosibirsk the dynamics was 9%, up to 26.8 thousand rubles. Etazhi noticed a 4.1% increase in prices in Tyumen, up to 20.9 thousand rubles. per month, and by 4.3% in Krasnoyarsk, up to 20 thousand rubles. At the same time, for example, in Chelyabinsk average monthly rate decreased by 10%, up to 18.9 thousand rubles. In Volgograd the decrease was 7%, to 21 thousand rubles, they add in Cyan.Analytics.

In Moscow, according to calculations by Cian.Analytics, renting one-room apartments now costs an average of 52.4 thousand rubles. per month, two-room apartments – 83.9 thousand rubles. Over the month, values ​​increased by 2% and 7%, respectively. The most budget proposals have been washed out of the market, and the cost of objects of a higher category remains stable, explains Oksana Polyakova, deputy director of the rental department of the Inkom-Real Estate company. The number of available economy class options, according to the expert, has reached a historical minimum: demand for them is now five times higher than supply. Liquid comfort-class apartments, according to her, can be rented out in one to two weeks. The head of the Apple Real Estate rental department, Vladimir Rodionov, notes that revival is also felt in the high-budget rental segment: at the end of September, supply decreased by two and a half times year-on-year, demand was one and a half times higher.

But globally, Olga Pavlinova already sees a gradual decrease in the seasonal activity of tenants in the market, by 10–12% compared to peak values. According to calculations by Avito Real Estate, demand for long-term rentals in Russia over the past month decreased by 19.8%, although it exceeded the figure for the same period last year by 2.2%. The most pronounced drop activity was observed in Rostov-on-Don (minus 39.3% compared to the previous month), Voronezh (minus 38%) and Volgograd (minus 32.1%). According to Cian.Analytics, the number of actions with advertisements over the past four weeks has decreased by 14% compared to the previous similar period and by 23% compared to the August peak.

Ms. Pavlinova does not rule out that demand will be fueled by potential tenants who have decided to postpone transactions to purchase their own home due to rising mortgage rates. “Demand this year will probably be 10-15% higher than last year,” she says. Although Konstantin Kamenev suggests that the deterioration of lending conditions, on the contrary, previously stimulated many to speed up transactions to purchase their own housing on more favorable terms.

A lull in the market, according to Oksana Polyakova, will most likely occur by December: during this period, owners usually have to offer potential tenants a discount of 5–15% to conclude transactions.

Low activity will help restore supply volumes. Alexey Popov expects average prices to decline by 5–7% over the next two months. Although Olga Pavlinova does not expect prices to fall, rather counting on their stabilization. The dynamics, in her opinion, will be restrained by the additional influx of tenants and the desire of owners to compensate for the increased costs of maintaining rental housing.

Alexandra Mertsalova