Soaring Moscow Real-Estate Prices

Posted On Wednesday, 21 April 2021 21:33

The costs of real estate in Moscow have risen significantly in the last year, according to CBRE Group, a global real estate, and investment firm. While the city has seen a fall in living costs this year, it was ranked among the Top 50 expensive cities of the world. The growth rate percentage of Moscow has been noted to be 8.9, which made it to be ranked 6th on the report of Global Living by CBRE. This is in arrears 10.2% of Madrid as well as 9.1% of Paris. 

Low Rates of Unemployment and Loan Benefits

The mounting demands, and inflation, have augmented the city’s rankings with 12.5m residents. CBRE has attributed Moscow’s rapid evolution in the costs of real-estate to less unemployment rates and beneficial conditions of the loan. According to the report, the price of growth of houses rankings has been topped by Barcelona at 16.9%. At the second rank is Dublin at 11.6% and following it is Shanghai at 11.2%. 

Homes that are prime were a part of the costliest ones in the capital of Russia together with Shanghai at an approximate cost of $2.4m. This list was topped with a prime property cost of $6.8m by Hong Kong and the typical cost of a property at $1.2m. The rise in the prices of Moscow’s real estate is highly significant. 

Russia’s Attractive Destinations

Nonetheless, city’s beauty is worth the land expenses. The capital, which has attractive touristic destinations, has been amongst the ones to be the most visited in Russia. Several attractions, including Red Square and Kremlin, are amongst the destinations that must be visited. Moreover, it has become even easier to go to Russia even as a tourist through the introduction of the Russia E-Visa. This has not only simplified the process of applying for a visa to Russia but also increased the chances of visiting the country. 

Investment Rise

The value of Russia has not only increased in terms of touristic attractions but also with regard to the rise in the value of the properties. The market of real estate in the country is back posterior an augmentation in the investment by 30 percent year by year in the first quarter. 

This has been the best result for the country in the past 3 years. The volumes of the real estate in Russia have reached as high as $967m in the year’s 1st quarter, rising from the investment made of $742m a year prior. 

It has been noted that a substantial increment has been there in the volume of investment at the starting of the year, which can be described through a few transactions of high values that were earlier postponed. 

Nonetheless, the investors continue to be cautious and are, therefore, adopting the approach of waiting and seeing. The market continues to face a shortage of products of real estate to be bought and further, in spite of the fact that the markets of debts and economy have been recovering and that the senior financing of debt is available at a lower interest rate, the deals’ volume has not augmented under negotiations. 

Residential Investments

The residential sector in Russia continues to be an active event though the development has been subdued to some extent through the alteration in rules that has banned the prior selling of apartments to customers which becomes active in the month of June.

Further, this sector has taken about a quarter, that is, 27 percent, of the overall investment, and in this case, as well, there has been a significant number of enormous deals. Prime Park, the residential complex was purchased by A1. 

Impact of the Pandemic

The response by the Russian government to the crisis of coronavirus has put the ownership of the home as well as construction again at its core, aiding the propelling of the industry at an even higher rate presently with a novel program where mortgages have been subsidized that permits borrowers to obtain a housing loan at a rate of 6.5% for an apartment that is built newly. 

This rate, which is still higher according to the standards of the West, was almost unlikely in the market of Russia even some years ago when the average rate of lending was the highest at 14 percent. 

Estate agents have been reporting a high rise since the program of subsidized mortgage launch. Savills Russia, with regard to the costs of novel apartments, has seen a number of instances where pre-sale costs have risen by approximately 10 percent in just a month. 

Further, the costs for novel builds have augmented by 19 percent per square meter since the beginning of the year. 

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