What Changes to Expect in Moscow Apartments’ Price
On the rental market for elite apartments in Moscow, even on the second market, always the decisive leading role is played by the certain exclusiveness from the context of the common market trend situation of the very object of sale, about which constantly realtors are constantly reminding.
Alexander Ziminsky who is the Director of elite real estate Department of PENNY LANE REALTY: “In the second-half of 2006 we observed small reduction in the demand. Reason to that - mass campaign SMI in the media, combined with the implementation of program “accessible living”.
In the end of last year even buyers of apartments in Moscow of the class de- luxes real estate expected reduction in the prices; however, no changes in this segment of market occurred. Now a quantity of transactions sharply grew due to the postponed demand of the recent months of last year. Demand for Moscow apartments, which from all parameters correspond to the high demands of our clients, as before considerably exceeds supply, and we do not see prerequisites for changing the situation.
The number of Moscow apartments of the class de- luxes is limited, reason to that - serious scarcity of construction sites in the center of Moscow. In the end of 2006 only a little more than usually, the so-called “investment” apartments were offered for sale, but these proposals were numbered and they did not have any serious influence on the situation. Indeed if one assumes that in the elite club house seven apartments out of 30 that were purchased with the purpose of investment and they all will be offered for sale, situation on the market principally will not change.
For the last year of 2006 prices for the apartments in Moscow jumped on average 30-80%, but there are apartments whose price increase was 100 %. Today we have offers where prices of one square meter exceeds 35000 US dollars.
For the sake of fairness it is worthwhile to note that not entire volume of proposal enjoys unconditional demand from buyers. The one who is ready to lay out for exclusive apartments a sizable sum of money, he wants to obtain apartment “turnkey”. Moreover the demand is for the apartments with the remodeling of very high level (the surfacing materials only of foreign production, frequently with special order, and it is required author's project with the attraction of designers, now and then known), emphasizes Alexander Ziminskiy.
The cost of a repair begins from $1 thousand for 1 sq. m., but these investments absolutely reasonable, since with the investment of $2-3 thousand for 1 sq. m. salesman in the implementation can freely add to $7-8 thousand, and sometimes even more. This is combined with the fact that offers for the apartments with quality remodeling are limited. Alexander Ziminskiy: “In the first months of 2007 we observed increase to 3-5% for 1 sq. m per month.
Policy will in many respects determine situation on the market for real estate. It goes without saying, prices of elite real estate in Moscow will continue to grow, but by smaller rates than in the previous years. Now we observe the making of more active demand after the calm for the end of 2006. Summer will be traditionally calm, and in autumn on the eve of the elections also we should not expect abrupt changes in the relationship between supply and demand”.
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