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Saint-Petersburg Residential Market

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RESEARCH 2018 PRIME RESIDENTIAL REAL ESTATE MARKET REPORT Saint Petersburg HIGHLIGHTS The total area of prime housing sold in As a result, the supply made 158.6 thousand The average supply price was 342.4 2018 reached 55.1 thousand sq m, which sq m in 2018. Most prime flats and thousand rub. per sq m. exceeded 2017 numbers by 2%. The apartments were located in Petrogradskaya average price per transaction grew by 3%, Side and on Petrovsky Island. equalling 42.4 million rub. PRIME RESIDENTIAL REAL ESTATE MARKET REPORT. SAINT PETERSBURG PRIME RESIDENTIAL Ekaterina Nemchenko Head of Prime REAL ESTATE MARKET REPORT. Residential Real Estate Department, Knight Frank St Petersburg SAINT PETERSBURG «The year of 2018 will be best remem- Key indicators bered by all real estate players as dynamic and generous for events. The market was Indicator Dynamics* quite busy for a full year with a clear trend of increasing demand that resulted Flats supply, thousand sq m 158.6 -5% in decreased supply by the end of the year. On top of that, we should mention Demand for flats, thousand sq m 55.1 5 investors coming back to the prime real 2% estate market. They not only focus on the new sites but also aim at the secondary The total living space area of prime residential complexes where sales started in 2018, 68.1 17% 5 housing market. The investors are ready thousand sq m to engage in reconstruction for rental pur- poses and future property sale. The total living space area of commissioned 75.3 -57% Worth mentioning is the increasing prime residential complexes, thousand sq m demand from prime housing buyers for mortgage deals and the growing number Average price, thousand rub. per sq m 342.4 -1% of deals financed by loans. We can observe * Compared with 2017 an increasing demand for high cost prop- Source: Knight Frank St Petersburg Research, 2019 erties and frequent deals closed at 100 million rub. and higher. Another trend to pay attention to is the Supply comeback of suburban real estate owners The total area of prime flats put up for sale housing market offering 2-bedroom flats to the city. This means growing demand as of the end of 2018 made 158.6 thousand with an area of 70−120 sq m, as well as for prime flats in central districts on the sq m (1.3 thousand flats). The supply indi- popular 3-bedroom flats with an area of part of those who permanently live in the cator shrank by 5% as compared to 2017 10 0−150 sq m which accounted for 18% suburbs with a view to subsequently relo- figures as a result of steady demand on the in the total supply figures. The increase cate to the city centre. prime housing market. in supply of unique and highly-demanded In addition to the traditionally popu- The prime residential real estate market 4-bedroom flats with an area of 120–180 lar locations in Centralny District and was replenished with two new upscale resi- sq m and over 220 sq m is worthy of special Krestovsky Island, there is a clear trend dential complexes located in Petrogradsky mention. Their share reached 13% during with prime housing buyers to acquire District – Petrovskaya Dominanta (Etalon the year. property on Petrovsky Island. Group) and Futurist (RBI). In total, 564 flats The locations of prime housing supply The turn in the market influenced the were added to the supply. The notable fact developers as well. We can observe them is that both new objects were launched redistributed by the end of 2018. The showing higher flexibility towards their on the market by the developers that year before, most prime flats offered were clients, offering new services, and paying previously focused on primarily Class B or located on Krestovsky Island as opposed closer attention to sales processes, ser- Class C properties. to the current trend, with the supply shift- vice quality, and communication with real As a result, the 2 new properties covered ing to Petrogradskaya Side and Petrovsky estate agencies». the main share of supply on the prime Island (31% and 28%, respectively). 2 2018 RESEARCH Dynamics of prime flats supply 20 thousan 10 80 0 2010 2011 2012 201 201 201 201 201 2018 Source: Knight Frank St Petersburg Research, 2019 Supply of prime flats by the number of bedrooms and types of areas 5 bedrooms 1 bedroom 2 bedrooms 3 bedrooms 4 bedrooms and more below 70 sq m 7% 1% 70−100 sq m 7% 24% 0.2% 100−120 sq m 12% 7% 120−150 sq m 0.3% 4% 11% 4% 0.2% 150−180 sq m 2.3% 2% 5% 180−220 sq m 1.5% 0.2% 2% 1.2% over 220 sq m 0.8% 4% 2% 1.8% Source: Knight Frank St Petersburg Research, 2019 Please share details on annual expectations. The real estate experts company results. and, most importantly, our customers Do you have any high points to men- highly appreciated the quality and the tion? concept. Many residents of our complex have already finished repairs in their flats «The year definitely went well. We com- pleted and launched the Dve Epohi and had a chance to see the New Year in». Residential Complex on Vasilyevsky Island, Please share your expectations for 2019 which was our pilot residential project in Irina Ivannikova Russia. When carrying out the project we «Currently our company is working on Sales & Marketing Director kept in mind that we had to create a facil- the design of a new complex in Ligovsky EKE Group ity according to the stated promise and Ave. We expect to open sales in the second deadline, and also develop a housing that half of the year and start the construction would have the Finnish air of comfort and stage. We are quite cautious for 2019 due high quality. At the same time we had to the too many changes in the legislation, How did 2018 go in terms of to adapt it to demanding St. Petersburg which can potentially affect both develop- corporate activities? clients, especially in terms of architec- ers’ profits and costs related to the new Could you mention a remarkable event? ture. The boost of sales surpassed our projects». 3 PRIME RESIDENTIAL REAL ESTATE MARKET REPORT. SAINT PETERSBURG Demand In 2018, the sales volume of prime housing The choice in favour of more spacious children or parents, noticeably decreased exceeded the 2017 results by 2%. 55.1 thou- apartments on the part of buyers is due to by 6 p. p. as compared to 2017. sand sq m (around 400 flats) of prime hous- the prevailing motivation to improve living The structure of transactions depending ing were sold in 2018. As usual, the principal conditions and expand living space. The on the price of prime housing changed demand was for the 2- and 3-bedroom share of this type of purchases was up by flats. In the meantime, the average area of 7 p. p. over the year. At the same time, the as follows: the share of transactions with sold flats grew by 7 sq m, which means a share of buyers considering relocation to a flats ranging from 35 to 49 million rub. clear shift in demand for spacious flats. The more suitable district remains stable at the grew by 6 p. p., and the share of transac- increasing share of sold prime 5-bedroom level of 30%. In 2018, the purchase of flats tions with flats of over 50 million rub. rose flats by 2 p. p. deserves a special mention. for immediate family members, such as by 3 p. p. Dynamics of the total living space The structure of transactions at the Main reasons for flat purchase area of sold prime flats cost of prime housing 0 10 20 0 0 0 0 0 80 0 100 0 10% 20% 0% 40 0% 0 10% 20% 0% 40 thousan 2010 Relocation below 20 to mprove million ub. living 2011 conditions 2012 Relocation t ore 20−34 suitable million ub. district 201 35−49 201 Purchase for hildren/ million ub. parents 201 Represen- 50−89 tational million ub. 201 purposes 201 Investment over 90 201 million ub. 201 2018 2018 2018 Source: Knight Frank St Petersburg Research, 2019 Source: Knight Frank St Petersburg Research, 2019 Source: Knight Frank St Petersburg Research, 2019 Top Selling Property in 2018 among Prime Residential Complexes in Saint Petersburg Russky Dom Krestrovsky de luxe Neva Haus (LSR Group) (GPBI Development Severo-Zapad) (LSR Group) Source: Knight Frank St Petersburg Research, 2019 4 2018 RESEARCH The Studio Moskovsky Project in among the clients who put mobile Zaozernaya St is our first apartment hotel as a priority. They do not want to spend with a full range of hotel services. We their time and money on property owner- entered this market by establishing a sepa- ship, but prefer to rent. On the other hand, rate company, RBI PM, within RBI Group buyers started to realize the benefits of to offer dedicated facility management of “civilized” investment, when a specialist apartment hotels. The project itself will company manages your property in an also contribute to the market: at least in apartment hotel and guarantees a stable Vera Seryozhina terms of some indicators, Studio Moskovsky income for the owner. Director of Strategic Marketing obviously surpasses the declared three-star Another market trend is the price increase, RBI Group rank. which has become more noticeable than How did 2018 go for the company? We have another newly established com- before.
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