Forbes: The Premium Curve. Which new buildings are seeing the fastest growth in demand
The best value for money in Moscow is no longer concentrated in the central districts. Khamovniki was the most popular district among premium property buyers over the last 10 years. Now the demand for upper-price housing is shifting outside the Central Administrative District, to those districts where property developers are taking a comprehensive approach to transforming the urban environment and creating a developed infrastructure. The area near Paveletskaya metro station, which is being actively developed by PIONEER, is among the top most attractive locations in the capital. Forbes reports on the demand for new builds in Moscow.
“Given the unstable economic situation and the depreciation of the ruble, real estate remains one of the most reliable ways of investing money. For instance, in Q3 2023, demand for new buildings within the old boundaries of Moscow increased by 38% compared to Q2, according to PIONEER analysts. In annual terms, the quarterly figure increased by 42%. “We record the realisation of pent-up demand. Buyers have adapted to the current realities and have become more determined to enter into transactions,” said Evgeny Mezhevikin, Analytics and Marketing Concepts Executive at PIONEER. According to him, additional catalysts were the volatility of the ruble and the increase in the Central Bank rate.
According to the company’s analysts, the biggest growth of transactions occurred in the premium segment: 69,300 m² were sold in July-September alone, which is 2.8 times more than in the same period last year. This is the maximum growth among all segments: in elite segment, the sales volume increased 2.2 times, 1.8 times in the business class, and 3% in the comfort class.
655 transactions were concluded in the market of premium new buildings in Moscow in September 2023, and the figure increased by 93.8% over the year, said Anna Radjabova, director of the elite real estate department at Metrium Premium.
Quality supply in the secondary market is gradually shrinking, notes Andrei Solovyev, partner of the consulting company NF Group, while there is plenty to choose from among new buildings. “The impressive sales dynamics in the premium segment testifies to the quality and diversity of the exposition, as well as the conformity of the product to the buyer’s expectations,” explains Irina Dobrokhotova, founder of Best-Novostroy and managing partner of bnMAP.pro. Together with the desire of buyers to convert foreign currency into concrete during the weakening of the ruble, this strengthens interest in new buildings.
It is worth noting that the supply of premium-class housing is limited, accounting for only 4% of the total market volume in lots and about 7% in m². Since the beginning of 2023, three premium-class projects have gone on sale in Moscow. Over the past 12 months, six projects in this segment have been launched.
Average prices in the primary market for Q3 increased in all segments. Compared to Q2, the greatest dynamics was observed in the comfort and premium classes (+8%). In the business class, the growth was 4%, and 2% in the elite class. According to PIONEER analysts, the average price of 1 m² in Moscow’s premium class is 700,000 rubles”.
