There are practically no turnkey apartments left in new buildings in Moscow: what do sellers offer?

According to experts, in February 2024, only 11.3% of apartments and apartments were offered in Moscow new buildings with permission to put them into operation. The most acute shortage of finished housing from developers was observed in New Moscow and in the premium segment of the capital’s market.

In February, on the Moscow new building market, developers sold 74.9 thousand premises in new buildings. Of these, only 8.4 thousand apartments were offered in ready-made buildings. The supply of finished premises on the market of new buildings in Moscow (including New Moscow) amounted to only 11.3% of the total market volume. Meanwhile, in new buildings at the initial stage of construction, developers offered 15.5% of the premises, in houses at the stage of installation of floors – 58.3%, in buildings at the stage of finishing work – 14.9%.

Apartments in ready-made houses on the market of premium new buildings have become the most scarce in “old” Moscow. In February, developers of premium projects offered buyers 6.1 thousand premises. Of these, only 450 apartments and apartments were sold in finished buildings. Thus, in new premium-class buildings, only 7.3% of premises for sale were offered in ready-made buildings. Meanwhile, at the initial stage of construction, the volume of premium housing supply amounted to 14%, during the installation of floors – 59.3%, and in houses with finishing work – 19.4%.

“In 2023, there was great investor activity,” says Dmitry Golev, commercial director of Optima Development. – Against the backdrop of economic recovery and the closure of parts of foreign real estate and investment markets for Russian buyers, Russians sought to invest in apartments in Moscow. Since these investors were mainly focused on investing for the purpose of savings, they tended to choose ready-made housing that can be quickly either rented out or used for its intended purpose. Therefore, buyers often looked for apartments with full finishing from developers.”

A relatively small supply of finished housing is also observed in the mass market segment. In February, out of 22.9 thousand apartments and apartments in new buildings of economy and comfort class, only 3.2 thousand were sold in finished houses. In the total supply of mass new buildings, they make up only 14.2% of supply, while at the initial stage of construction, developers offer 18.8% of premises, at the stage of installation of floors – 57.4%, and at the stage of finishing work – 9.6%.

“The demand for ready-made apartments from developers was partly stimulated by an increase in mortgage rates for secondary housing,” notes Liliya Artsibasheva, commercial director of Regions Development. – In the fall, mortgage rates for potential buyers of secondary housing became completely unaffordable, and therefore these clients switched to the market of new buildings, but were looking only for ready-made apartments. This is what led to a sharp surge in demand for ready-made new housing and a reduction in its supply.”

In new business-class buildings, out of almost 20 thousand apartments and apartments in this market segment, 3.1 thousand are offered in ready-made buildings. In the total supply of new business class buildings this amounts to 15.6%. Meanwhile, at the initial stage of construction, the buyer can find 14% of the premises, and at the stage of installation of floors – 47.1%. At the stage of finishing works 23.3%.

“When looking for ready-made housing, we recommend that buyers pay attention to large-scale projects that already have not only completed, but also occupied buildings,” says Larisa Shvetsova, general director of the River Park company. “In this case, you can personally come and see how life is in the area, how well-equipped public spaces are, children’s playgrounds, and whether the infrastructure is rich. From this point of view, a visit to the River Park city block, where we have recently commissioned a new building, may be interesting. Here you can stroll along the long embankment, admire the views of the river, and perhaps the emotional impression will be the decisive factor in buying a finished apartment here.”

The largest share of finished housing is in the high-budget segment of the Moscow new buildings market. In February 2024, developers in this segment offered buyers 1.2 thousand apartments and apartments. Of these, more than 320 premises were in finished houses. In the total supply of the high-budget housing market, this amounts to 26.6%. While at the initial stage of construction, developers of luxury and deluxe new buildings offer buyers 13.1%, at the stage of installation of floors – 38.4%. During the finishing work – 21.9%.

In New Moscow, the supply of apartments in finished new buildings is extremely low. Of the 23.9 thousand premises on the local market, only 850 are sold in buildings with permission to commission. This represents 3.6% of the total local market. At the same time, at the initial stage of construction, developers in New Moscow offer 14.6% of the premises, at the stage of installation of floors – 71.1%, and at the stage of finishing work – 10.8%.

Metrium analysts note that on average, finished new buildings are more expensive than other properties on the real estate market. Thus, the average cost per square meter in new buildings in the mass segment (excluding offers in completed buildings) is 318 thousand rubles, while in finished new buildings it is 341 thousand rubles. In business class, the average price per square meter in buildings under construction is 430 thousand rubles, and in finished new buildings – 467 thousand. In premium new buildings under construction, an average square meter will cost 652 thousand rubles, while in finished houses – 717 thousand.

An exception to this rule is new buildings in the high-budget segment and New Moscow. In residential complexes under construction in the elite and deluxe segment, the average cost per square meter is estimated at 2 million rubles, while in finished new buildings in this segment it is 1.5 million rubles. This is due to the fact that in the high-budget segment, which includes elite and deluxe, a large proportion of the offers in the completed buildings are occupied by elite class premises.

In 2023, the number of deluxe class offers at the initial stage of construction has increased significantly. The remaining apartments in them are usually large, and the price per square meter is lower.

In New Moscow (excluding completed buildings), the average cost per square meter is 243 thousand rubles, while the average price per square meter in finished houses is 223 thousand. This is due to the fact that many ready-made projects of New Moscow were initially more affordable.

“In 2023, the Moscow new building market experienced an influx of failed buyers of secondary housing who could not afford to purchase at high mortgage rates,” says Ruslan Syrtsov, managing director of Metrium. – These clients switched to the primary housing market and were looking for ready-made new buildings, because they were not initially focused on participating in shared construction. This strategy is due to the fact that the purchase of new buildings is subsidized and mortgage rates for transactions between developers and buyers remain affordable. Most likely, in 2024, high demand for finished housing will continue against the backdrop of expensive mortgages on the secondary market and rising rental rates.”