By the end of Q1 2014, the offer in the newly built premium property market was 310 thousand square meters, including 202 thousand square meters of apartments and 108 thousand of suites (around 1,440 apartments and 740 suites). In March, the total offer grew 2% month-on-month, and in Q1, it rose 10% quarter-on-quarter.
In Q1 2014, the new offers in the market included suites in Residentsiya MONE (Presnensky, the Central Administrative District) and apartments in the second stage of another residential development, Sadoviy kvartaly (Khamovniki, the Central Administrative District). The total new offer is estimated at 53 thousand square meters, which is almost twice as high as in the previous year.
The share of suites in the total offer was declining throughout the quarter, but in March it bounced back to the start of the year’s levels, i. e. 35%, due to the launch of sales in the new development.
With its 65% of the total offer, the Central Administrative District is still leading the market in terms of offer. In Q1, its share grew by five percentage points quarter-on-quarter driven by new projects. Outside the Central Administrative District, new premium developments are offered in such districts as Donskoy (Southern Administrative District), Ramenki (Western Administrative District) and Shchukino (Northwestern Administrative District).
Khamovniki (25% of total offer) and Presnensky (28%) Districts still hold the lead in terms of offer volumes. Khamovniki’s offer is only represented by premium residential developments, including the largest ones in this segment: Sadoviy Kvartaly, Barrin House, etc. All new developments offered by the Presnensky District are suite developments.
As of late Q1 2014, primary sales are run in 19 residential and 11 suite developments, with 46% of newly built property already completed and commissioned, including Barkli Park. Another 30% projects are at the assembly stage. 17% projects are at the stage of below-grade construction, including Barkli Residence.
Prime suites measure around 145 square meters in average, and apartments, 140 square meters. The bulk of the offer (around 40%) consists of apartments and suites measuring between 100 and 150 square meters. Early Q1 2014 recorded a decline in average USD offer prices in the newly built premium property market: firstly, due to the rising US dollar exchange rate (around 60% of the total offer in this segment is offered at ruble prices), and, secondly, due to the launch of sales in new projects at the early construction stage. In February and March the prices stayed actually flat in both rubles and US dollars. By the end of March the average offer price in the newly built premium property market was $13,550 per square meter (+0.4% month-on-month).
The average offer price of residential developments in the Central Administrative District was $14,160 per square meter (+0.4% month-on-month), and that of suite developments in the Central Administrative District was $13,840 per square meter (+0.3% month-on-month). The average offer price of new premium residential property outside the Central Administrative District came at $12,500 per square meter (+1.6% month-on-month).
Thus, in March 2014, new residential property outside the Central Administrative District posted the highest growth driven by a direct price hike in the pricelists for a number of projects at the active construction stage. In most properties, however, prices stayed flat. Arbat ($21,350 per square meter), Tagansky ($15,500 per square meter) and Ramenki ($15,370 per square meter) still hold the lead in terms of offer prices.Early in the year the residential property market responded to ruble devaluation by a clear recovery in all segments. On the back of general uncertainty, home property grew more attractive as the only investment option. Even the typically calm periods (from December to February) recorded high market activity. This March, however, somewhat calmed things down due to the active implementation of pent-up demand in the first two months of the year, and the aggravating situation in the Ukraine that made some buyers take on a waiting stance._ _Meanwhile, the market situation is considered to be stable. New projects are launched in the market, with their offer especially strong in the premium segment. As expected, prices for projects at the active construction stage keep growing which is typical for later completion stages.
In the mid-term, subject to ruble depreciation and, accordingly, higher construction costs, prices will tend to grow, with projects under construction to record the highest growth rates. Newly built property can be viewed today as the most attractive investment targets.