IntermarkSavills presents analysis of the "Moscow Elite Residential Markets for Q1, 2010".

15 april 2010

IntermarkSavills presents the overview "Moscow Elite Residential Markets for Q1, 2010".Which encompass the elite, business-class, out-of-town sales and rental markets. Few words about these markets in Q1, 2010:

The instability of the currency exchange markets has had a significant impact on the elite residential rental market. At any sign of a strengthening Ruble, Landlords are making steps to protect themselves from any risk of loss. Thus, they are choosing to include protective mechanisms within lease agreements such as to conclude rental contracts in foreign currency terms, establish a currency corridor or postpone the signing of the contracts until a favorable exchange rate is reached.
Such Landlords` behavior can often impact negatively on the letting process by prolonging the period of negotiation. Furthermore it can be negatively received by corporate tenants as their allocated rental budgets are often fixed or linked to the national currency and can not be adjusted.

Galina TKACH,
Director of Leasing Department, IntermarkSavills

New-build business-class properties are again becoming of interest for the client: during the first three months of this year the number of closed newbuild transactions increased by 20%, average dollar prices increased by 6%, and average ruble prices – by 2%.
Concurrently, the supply of business class apartments has shrunk by 35% over the last 12 months. The majority of the residential complexes for sale have been 70-80% sold out. This means that it is time that the developers operating in Russia’s Capital consider starting new projects and ‘unfreezing’ suspended ones, whilst of course taking into account lessons learned from the crisis…

Dmitry KHALIN,
Head of Strategic Consulting and Evaluation Department IntermarkSavillsDirector of Leasing Department, IntermarkSavills

In Q1 2010 revival in demand was registered in the country property market: 1.5 times more properties were sold compared to the same period in 2009. Communities within completed housing estates led the market in terms of sales.
Over the last six months, the pricing of elite country property has been stable, and in February-March priced increased by 5% on average. In the near future the growth of prices and the number of transactions will continue, mainly due to the seasonal activity of the buyers.

Senior Analyst of Marketing and Market Monitoring Department, IntermarkSavills

In Q1 of 2010 the number of closed transactions for elite apartments was twice higher than the same period in 2009. The market is reviving and getting closer to pre-crisis figures in terms of the volume of demand.
During the last three months US Dollar prices for new-build elite property increased by more than 5%. It is too early however to talk about the start of a new price rally. The budding positive price dynamics is mainly linked to technical factors such as completed sales of the most inexpensive apartments, increasing level of readiness of complexes under construction, currency fluctuations, etc.

Ekaterina GURIEVA,
Head of In-town Residential Real Estate Department, IntermarkSavills