Transactions on the market of luxury new buildings in Moscow in 2023 will grow to 176 billion rubles. according to NF Group estimates

Wealthy Russians, trying to preserve their funds in the absence of wide alternatives for investment, began to actively invest money in the purchase of luxury real estate in Moscow. This could lead to a 73% increase in transaction volumes in the segment by the end of 2023, and their total amount will reach RUB 176 billion. Against the backdrop of good sales, developers are striving to increase their portfolio of projects, however, due to the growth of the Central Bank key rate, investments in housing are beginning to compete with bank deposits.

By the end of 2023, in the market of elite new buildings in Moscow, the total amount of concluded transactions will reach 176 billion rubles, which is 73.4% more year-on-year, NF Group calculated. The volume of apartments sold will be 1.35 thousand—this is an increase of 57% year on year. The founder of Kalinka, Ekaterina Rumyantseva, expects 1.3–1.4 thousand transactions by the end of this year, or 40% more than a year earlier. AREA board member Grigory Ashikhmin speaks of an increase in demand by 30–50%. At Sminex-Inteko, the number of transactions concluded is already 26% higher than the figure for the entire last year. Managing partner of Intermark City Real Estate Dmitry Khalin notes that in the incomplete fourth quarter, sales are 1.8 times higher than last year’s figures.

At the same time, according to NF Group partner Andrey Solovyov, in St. Petersburg in the first nine months of the year, sales increased by only 5%: 247 transactions were concluded. He calls demand in the city high, but constrained by limited supply. In Moscow, from the beginning of 2023, sales began in 11 buildings of elite new buildings, in St. Petersburg – only in two, adds managing partner of bnMAP.pro Irina Dobrokhotova. According to her, in St. Petersburg, average prices for luxury new buildings increased by 16.7% over the year, to an average of 691 thousand rubles. for 1 sq. m. In Moscow, this figure amounted to 1.38 million rubles. for 1 sq. m, or 6.2% more than a year ago, calculated Anna Radjabova, director of luxury real estate management at Metrium Premium.

The demand for expensive real estate, according to Mr. Solovyov, is ensured by the activity of investors looking for understandable and least risky investment instruments. “But such a strategy allows you to save funds rather than increase them,” the expert warns. Grigory Ashikhmin believes that activity in the elite segment is also facilitated by excess ruble liquidity. “When the profitability of alternative financial instruments decreases, there is always an increase in demand for premium real estate,” notes Tatyana Podkidysheva, executive director of NDV Supermarket Real Estate. Rariteco Development Director Ekaterina Borisova believes that an additional factor is the cooling of interest of wealthy Russians in real estate abroad.

The revival in the market of luxury new buildings this year is taking place against the backdrop of last year’s low base, emphasizes Roman Rodiontsev, director of the project consulting department at Est-a-Tet. According to NF Group, in 2022 the number of transactions concluded in the segment decreased by half compared to 2021. Current sales, however, are spurring the activity of developers: in Moscow, over the nine months of the year, according to Est-a-Tet, 36.2 thousand square meters were brought to the elite market. m of new supply is three times more year on year. Roman Semchishin, vice president of sales at Sminex-Inteko, believes that the luxury housing market is “less volatile, and the influence of mortgage programs on it is insignificant.”

Grigory Ashikhmin expects further growth in the segment of luxury new buildings due to the fact that developers will continue to increase construction volumes. Nika Estate owner Viktor Sadygov notes that the structure of buyers is changing: if previously expensive apartments in Moscow were mainly bought by top managers of large companies, now it is entrepreneurs from the regions. “There hasn’t been such rotation in the elite market for a long time,” he notes. But Andrei Solovyov does not rule out that with the growth of the Central Bank’s key rate, many investors will return to placing funds on deposits, which may restrain the demand for expensive real estate.

Alexandra Mertsalova