Prime Residential Real Estate Market Moscow
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The total transactions The supply volume cost exceeded shortened to 2,1 thousand 110 bln rubles apartments and flats PRIME RESIDENTIAL REAL knightfrank.com/research ESTATE MARKET MOSCOW 2020 PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW Key findings Shift of the traditional leading Acceleration of price growth in the Khamovniki district from the leading context of supply volume shortage: 890 positions in the demand structure thousand rubles / sq. m (+10% in the rating. The district of Dorogomilovo Andrey Solovyev annual dynamics). became the most popular location Director of City Sale Department, Stable growth of share of supply with among the buyers. Knight Frank finishing was supported by increase The total transactions cost exceeded 110 of demand for units ready for living; bln rubles, having renewed the record more than 60% transactions were in rate of the previous year. this format. The historically record-high level of buying activity may be considered to be one of the key events at the elite housing market. Key indicators. Dynamics The growth of number of incoming calls/ requests for accommodation acquirement was recorded even during the severe Supply Deluxe Dynamics* Premium Dynamics* restrictive measures; however, during those ‘quarantine’ months only part of them was Total supply, pcs. 480 -38% 1,640 -11% converted to transactions. Several factors Average price, thousand became the main reasons for the records. 1,362 +18% 696 +15% rub./sq m First of all, square meters always remain a stable currency in the context of high volatility Average area, sq m 160 +6% 115 +3% of the financial markets, and many customers Average price, mln rub. 218 +24% 80 +18% decided to enter the transactions to insure themselves against the depreciation of their Supply Deluxe Dynamics* Premium Dynamics* savings or to perform the purchase planned Total supply, pcs. 200 -38% 1,110 +30% long ago. Besides, elite immovable property Average price, thousand became more available for the customers 1,198 +23% 602 +7% who hold their savings in USD considering rub./sq m the ruble price formation of the market Average area, sq m 161 -3% 110 +6% and exchange rate growth. Also deferred demand, which partially compensated the Average price, mln rub. 193 +20% 66 +14% ‘fail’ during the second quarter, was formed * Q4 2020/Q4 2019 due to pandemic. Another demand driver ** 2020/2019 in the market is mortgage due to reduced Source: Knight Frank Research, 2021 rates. Generally, quick adaptation to the new conditions and creation of new, more flexible systems of cooperation between the developers and customers positively influenced the restoration of the market. During the pandemic we also noticed the Supply structure by class Supply structure by property type transformation of requests of the buyers who vividly sensed the need for the new level of safety, privacy and comfort both inside the apartments and within the public D P Flats A zones of the projects. Basic tendencies include availability of personal open space in the outdoors (balconies, terraces and patios on the first floors); more attention is paid to the aspect of engineering technical systems now and the tendency of purchasing accommodations with finishing became more stable. 2 77% 9 51% Source: Knight Frank Research, 2021 Source: Knight Frank Research, 2021 2 PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW Supply The high level of buying activity during the was at the level of 265 thousand square several objects was deferred to the next 2hd half-year period of 2020 combined with meters. periods. Generally, we expect that the level a small number of new projects became of developers’ activity in 2021 is going to During 2020 the developers launched the reason for reduction of supply volume be higher compared to 2020. new projects to the market not active. in the primary market of elite housing. Nowadays the geography of new projects is In total, from January till December As of the end of 2020 it was estimated not attached to a certain district. The devel- the elite segment was supplied with at 2.1 thousand apartments and flats, opers work on projects at very different 7 new buildings, 4 of them being the which is 19% lower than the figure of the locations, from prestigious and expensive Q4 2019. The total area of the units premium-level complexes and 3 being Ostozhenka district to the more cost-effec- reduced by 18 percentage points and deluxe complexes. The start of sales of tive Western direction of Dorogomilovo. Share and average cost of supply by district Сокол Аэропорт Щукино Савеловский Сокольники Преображенское Marina Roshcha T Setenka Izmajlovo Begovoy Meshhanskij 3% mln 13% 145 mln Khoroshevskiy 2 ₽ Krasnosel'skij ₽ P C 1% 2 mln 11% 0 mln ₽ ₽ Basmannyj P A Krylatskoe 5 1% 2 mln 8% mln ₽ ₽ 1 Lefortovo 8 7 Perovo T OP 4 8% 87 mln 3% 29 mln 6 ₽ ₽ Dorogomilovo 2 D Zamoskvorech'e 3 29 ₽ mln 2 ₽ 2 mln P Yakimanka Ryazanskiy 4% mln 6% 2 mln ₽ Juzhnoportovyj ₽ Danilovskiy R K 5% ₽ 2 mln 6% ₽ 0 mln Kuz'minki Gagarinskiy S Average cost . Ochakovo-Matveevskoe . Akademicheskiy 9 ₽ 76 mln . Nagatinskij Zaton Lomonosovski Kotlovka Nagatino-Sadovniki Ljublino Prospekt Vernadskogo Nagorniy Pechatniki Obruchevskiy 1. Troparevo-NikulinoLumin 5. Club House on Gazetnyi 2. Titul at Yakimanka 6. Prechistenka, 8 3. Victory Park Residences 7. Tessinskii, 1 4. Zolotoi 8. Titul on Serebrianicheskaia (new buildings) Source: Knight Frank Research, 2021 3 PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW Complexes where sales began in 2020 Commis- Property Number Market Name Address Class Developer Finishing sioning Type of units Launch Date bld. 5, 2/5/4, Hutton June With 1 Lumin Slavianskaia sq. Premium flats 54 Q4 2022 Development 2020 finishing (Tagansky) 8/2 2nd Titul at Center- apart- September Without 2 Khvostov sbu-str. Deluxe 18 Q3 2021 Yakimanka Invest ments 2020 finishing (Yakimanka) 3 Bratiev Victory Park ANT apart- September With 3 Fonchenko str. ( Premium 482 Q4 2023 Residences Development ments 2020 finishing Dorogomilovo) May 2020 18-20 (private sales) Capital apart- Without 4 Zolotoi Sofiiskaia emb. Deluxe 126 November Q2 2021 Group ments finishing (Yakimanka) 2020 (official start) 13/15 Gazetnyi Club House Active July Without 5 sub-str. Premium flats 24 Q2 2021 on Gazetnyi Center 2020 finishing (Tverskoy) 8/1 Prechisten- August With 6 Prechistenka str. Deluxe Insolver flats 10 Q3 2023 ka, 8 2020 finishing (Ostozhenka) 1 Tessinskii apart- October Without 7 Tessinskii, 1 sub-str. Premium Insigma 71 Q4 2022 ments 2020 finishing (Tagansky) New buildings Titul on 7-11 Serebrianich- apart- Center September Without 8 Serebrian- eskaia emb. Premium ments 175 Q2 2021 Invest 2020 finishing icheskaia (Tagansky) and flats Source: Knight Frank Research, 2021 Dynamics of average price and supply volume S A e . 350 900 325 850 300 800 275 750 250 700 225 650 200 600 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2019 2020 Source: Knight Frank Research, 2021 4 PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW At the same time the peak of appearance of elite residential complexes was in 2018, Primary market supply structure. Deluxe when the segment was supplied with 21 new objects and one new phase in the implemented project. High develop- 50–100 100–150 150–200 O ers’ activity was recorded in 2019 as well: . . . . . 18 new projects and one new phase. . If in the deluxe class the market was mostly supplied with club-type projects, in premi- 100– . um class the enlargement of the develop- ment format during the last several years 150– . is noted. Since 2018 the share of supply at 200– . the premium level complexes has increased by 15 percentage points, and currently the O . relation between the deluxe and premium shares is 23%/77% correspondingly. Source: Knight Frank Research, 2021 The doubtless leader regarding the supply concentration is the Dorogomilovo district. During the year its share in the Primary market supply structure. Premium general structure increased from 17% to 29%. Tverskoy district characterized by the largest number of new buildings 30–60 60–90 90–120 O 120 is in the second place. 13% of all units . . . . . are concentrated there. Presnenskii district, the share of which reduced by . 3 percentage points due active demand 50– . in the location, was included in the top 3 as well (11% of the supply). 100– . 150– . O . Source: Knight Frank Research, 2021 Supply structure by the construction stage. Deluxe 9 34% 3% 13% 41% C C ks works works Source: Knight Frank Research, 2021 Supply structure by the construction stage. Premium 29 2 13% 7% 2 C C ks works works Source: Knight Frank Research, 2021 5 PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW Demand In 2020 the elite residential real estate market showed excellent results Primary market transactions structure. Deluxe despite all the negative consequences of quarantine measures. The historically 50–100 100–150 150–200 O 200 record-high sales during the last . . . . . months (about 670 transactions during . the fourth quarter) allowed not only 100– . to compensate the ‘fail’ of the second 150– . quarter, but to excess the results of 2019 200– . as well. The total number of transactions from January till December was more O . than 1.3 thousand, which is 11% higher than the results of the previous year. At Source: Knight Frank Research, 2021 the same time their total cost reached 112 bln rubles, having exceeded the results of 2019 by 10% and the results of Primary market transactions structure. Premium 2018 by 45%, having renewed the 6-year record. 30–60 60–90 90–120 O 120 It should be noted that in 2019 significant . . . . . positive dynamics was partially based . on the growth of interest towards the 50– .