News

05/03/14

New premium property market. Moscow. February 2014

In February 2014, the offer in the newly built premium property market declined by 1% month-on-month to 304 thousand square meters, including 211 thousand square meters of apartments and 92.8 thousand of suites (around 1,500 apartments and 630 suites). There were no new offers in the premium market during the month.

The share of apartments in the premium segment did not change much and accounts for 30% of the total offer in terms of volume and total area.

At present, property is offered in 19 residential and 10 suite projects, with 48% new developments that still offer primary sales already completed and commissioned, including Barkli Park. Another approximately 30% of projects are at the assembly stage.

Prime suites measure around 150 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.

The offer breakdown by district did not change much month-on-month. The offer in the new residential segment is still evenly distributed among the districts of the Central Administrative District districts outside the Central Administrative District (Donskoy, (Donskoy, Ramenki, Shchukino). Khamovniki remains the leader in terms of offer volume (40% of the total offer and around 80% of the offer in the Central Administrative District).

So far, premium suite properties are only offered in the Central Administrative District. The Presnensky District (towers of Moscow International Business Center “Moscow-City”) is leading in terms of the amount of offer. Its share dropped by five percentage points month-on-month driven by the sale of a certain volume and now sits at 73% of the total offer in the premium suite market.
The average offer price in the new premium development segment did not change much month-on-month and comes at $13,500 per square meter (+0.7% month-on-month).

The average offer price in residential projects of the Central Administrative District is $14,100 per square meter (-1.5% month-on-month), and that in suite projects of the Central Administrative District is $13,800 per square meter (+1.7% month-on-month). The average offer price in the premium residential segment outside the Central Administrative District is $12,300 per square meter (+1.2% month-on-month).

The market currently records a mounting demand caused by investors willing to withdraw their assets from other projects into real property. This is due to both instability in financial markets and frequent banking license withdrawals. In the absence of economic upheavals, we will witness a smooth price increase that will be primarily driven by inflation.
Nonetheless, the price of projects at the active construction phase will grow faster due to their higher completion stage.
The investment hike is most likely to remain there until a certain exchange rate balance is reached, and then demand will stabilize.

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