PRIME RESIDENTIAL REAL ESTATE MARKET Moscow
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RESEARCH H1 2019 PRIME RESIDENTIAL REAL ESTATE MARKET Moscow HIGHLIGHTS The average weighted lot price showed a new The share of the lots with final finishes There was a slowdown in the developer record increase of 12% in the elite segment rose by 12% since the beginning of the activity. Thus, only two new properties were over the last six months. year causing an increase in the number of launched to the market over Q2 2019. transactions in this category. PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW prime Residential real estate market Supply As of H1 2019, about 2,200 lots of elite and strong demand as well as the scarce volume premium new-build residential property, total of new supply. Meanwhile, the supply figure area of 274,000 sq m, were listed for sale in is back at the level of the end of last year. Moscow. The figure has dropped for the first Thus, looking at the current figure changes time since Q3 2018. The number of flats and compared to H2 2018, we can see that the apartments listed for sale decreased by 10% in number of lots has remained unchanged the elite segment and by 8% in the premium (+1% over six months). And the 4% decrease in Andrey Solovyev segment, over the past three months. The elite supply was balanced by the 4 percentage Director of City Sale Department, drop in figures was mainly caused by the point growth in the premium segment. Knight Frank Key indicators. Dynamics Supply “The key market indicators have been Elite Premium changing as expected: the growing Dynamics* Dynamics* demand trend along with the slowdown segment segment in developer activity have led to a drop Total supply, pcs. 801 -4% 1 402 4% in the supply. Meanwhile the current Average price, thousand 1,110 12% 602 0% uncertainty about implementing the rub./sq m new amendments to the law seems to Average area, sq m 155 -1% 107 1% only strengthen the trends. It is already Average price, mln rub. 171 11% 64 1% the case that the demand is gradually Elite Premium shifting towards the secondary high- Dynamics** Dynamics** end market, which is likely to be seen segment segment more distinctly further on.” Demand Total supply, pcs. 157 -13% 398 25% Average price, thousand 892 23% 572 10% rub./sq m Average area, sq m 160 22% 104 9% Average price, mln rub. 142 51% 59 20% * H1 2019 / H2 2018 ** H1 2019/H1 2018 Source: Knight Frank Research, 2019 Supply volume and average price dynamics of the primary market . 320 850 300 800 280 260 750 240 700 220 200 650 Q1 Q1 Q1 2017 2018 2019 Supply volume Average price Source: Knight Frank Research, 2019 2 H1 2019 RESEARCH Share and average price of supply by district Marina Roshcha Tverskoy S Izmajlovo Begovoy Meshhanskij 1 mln 1 11 mln Khoroshevskiy 63 ₽ Krasnosel'skij ₽ Chistye prudy Sokolinaja Gora Presnensky 1 ₽ 92 mln Basmannyj 1 1 mln 5 ₽ 8 Patriarshie prudy Krylatskoe 4 1 2 mln A ₽ Lefortovo 6 Perovo 11 112 mln 2 Tagansky ₽ Filevskiy Park 7% 11 mln Ostozhenka–Prechistenka 1 ₽ Dorogomilovo 4% ₽ 222 mln Zamoskvorechye 9 1 mln Plyushchikha 3 Nizhegorodskij₽ Fili-Davydkovo Yakimanka 5% ₽ 119 mln Ryazanskiy 12 9 mln Juzhnoportovyj ₽ R Danilovskiy 8% ₽ 2 mln Tekstil'shhiki Share Average Kuz'minki Khamovniki Gagarinskiy in the total supply price 10 ₽ 10 mln 9 ₽ 76 mln Ochakovo-Matveevskoe 7 Akademicheskiy > 200 mln rub. Other 100–200 mln rub. < 100 mln rub. 1 Nagatinskij Zaton Lomonosovski Kotlovka Nagatino-Sadovniki Ljublino Complexes where official sales started in H1 2019 Property Number Launch of Delivery Title Address Class Developer Finishes type of lots sales date Allegoria Ostozhenka St, 4, 6 1 elite Stroyteks apartments 57 March, 2019 No finish Q2 2021 Mosca (Ostozhenka) Arbat St., 39 February, 2 Artisan elite Valartis Group flats 30 No finish Q4 2016 (Arbat) 2019 Yefremova St, 9А January, 3 Eight Yards premium PST apartments 8 No finish Q1 2020 (Khamovniki) 2019 2nd Zvenigiridskaya St, flats, apart- January, 4 Lucky prop 12, bldg 6 premium Vesper 654 Final finish Q4 2021 ments 2019 (Presnensky) Stoleshnikov Stoleshnikov Ln, 7 bldg VMS-Develop- 5 elite apartments 12 May, 2019 Final finish Q2 2020 7 1 (Tverskoy) ment Noviy Arbat St, 15 January, 6 The Book premium Capital Group apartments 104 Final finish Q3 2019 (Arbat) 2019 Lobachevskogo St, 114 7 Reka premium Donstroy flats 115 June, 2019 No finish Q4 2021 (Ramenki) March, 2019 Kuznetskiy Kuznetsky Most St, 12, (previously 8 elite KR Properties apartments 62 Final finish Q2 2020 Most, 12 14 (Tverskoy) private sales) Source: Knight Frank Research, 2019 3 PRIME RESIDENTIAL REAL ESTATE MARKET. MOSCOW Only two high-end properties were launched Supply based on their area to the market in Q2 2019: Stoleshnikov 7 Elite Club House by VMS-Development 2 2 and Reka Premium Residential Complex by 9 Donstroy. Therefore, the number of new 19 10 1 properties amounted to eight in H1 2019, including the complex Kuznetsky Most 12, 47% which finally came out of private sales in E Premium Spring 2019. 2 100 10010 Meanwhile, Reka is situated in Ramenki 38% 36% 10200 district, which is quite a rare location for 20020 this price range, for it is seldom that high- 20 end properties are built outside Central Administrative District. Indeed, all the high- Source: Knight Frank Research, 2019 end properties were launched exclusively within the central districts of Moscow over Supply based on their price the past year and a half. Currently, there are 2 2 several more properties under development that are going to be located in the western 4% 9 part of the city as well. 2 29 The largest volume of supply is still 44% concentrated in Presnensky district (16% of E Premium all supply). Tverskoy district is on the second 1 0 place followed by Yakimanka with their 13% 0100 43% and 12% accordingly, with the latter having 10010 2 pushed Arbat off this position, Arbat’s share 10200 200 now amounting to 11% due to massive sales at The Book project. Source: Knight Frank Research, 2019 The structure of supply has hardly changed in the premium segment over the past six months. Almost half of the supply (47%) Primary market supply structure is represented by compact lots of under 0 0100 10010 10200 200 100 sq m. Finding a flat or an apartment of over 200 sq m appears to be most difficult 100 2 9 10 01 00 as such lots amount to 4% of all premium 100–10 0 22 8.6% 12 1 new-builds. The non-expensive supply priced under 50 million rubles and within 10–200 00 5.7% 5.6% 1 2 50 to 100 million rubles comes in almost 200–20 00 02 09 1 22 equal shares of 44% and 43% accordingly. 20 00 00 02 0 3.4% The average area amounted to 107 sq m by the end of June, while the average price Source: Knight Frank Research, 2019 stood at 64 million rubles, which in both cases is by 1 percentage point more than at Supply structure by the construction stage the end of 2018. The number of expensive lots priced over 150 million rubles has increased by eight percentage points to 39%. Flats and apartments of 100 to 150 sq m still make up a bigger part of the structure of supply by area. The average lot area of elite supply has declined by 1% to 155 sq m over the 2 1 7% 9 35% C A past six months. The average lot price, on ks works works delivered the contrary, reached 171 million rubles Source: Knight Frank Research, 2019 showing an 11%-growth. 4 H1 2019 RESEARCH Demand Transactions of the primary market based on their area The quarterly performance on transactions 01 is comparable to last year’s figures, namely, 3% 10 1 300 lots over Q2 2019. In general, over 12 550 flats and apartments were sold in 8% H1 2019, with each third of them being with final finishes, while a year ago, the figure did E Premium 53% not exceed 25% of all trading volume. The increase in this category of deals correlates 2 2 37% directly with the current market trend. The 100 10010 increase in this category of deals is directly 10200 correlated with the market trend for the sale 20020 of the most ready-to-live housing. Thus, 20 while about 31% of flats and apartments Source: Knight Frank Research, 2019 had final finishes at the end of 2018, the share of such lots rose to 43% over the Transactions of the primary market based on their price past six months. 1 2 The price of a deal increased by 26% to 83 million rubles as compared to H1 2018, 4% 6% which is largely due to signing several 20 major transactions at high prices. The buyers’ interest to the expensive lots (over 5% 43% 200 million rubles) increased 3 times. Thus, E Premium 2 38 such flats and apartments were sold 36% over the past six months, compared with 14 a year ago. Penthouses, lots with terraces 1 0 and unique view characteristics were 0100 especially sought-after. 10010 10200 200 Source: Knight Frank Research, 2019 Primary market transactions structure 0 0100 10010 10200 200 100 33.3% 8.3% 00 00 00 100–10 4.5% 229 5.6% 00 02 10–200 02 0 6.3% 11 1 200–20 00 00 11 2 1 20 00 00 00 02 3.8% Source: Knight Frank Research, 2019 Leading projects Sadovye Kvartaly Lucky The Book 5 PRIME RESIDENTIAL REAL ESTATE MARKET.