Supply in Moscow's primary residential property market is strong but not record-breaking

Throughout the year 2022, the supply volume has steadily demonstrated strong growth, both against a background of high property development activity – new projects brought to market – and a somewhat restrained pace of implementation, due to which the figure has increased by 49% for the year; however, it is still premature to speak about record values.

PIONEER analysts have summarised the results of Q1 2023 in Moscow’s new builds market (apartments and serviced apartments). According to the end of Q1 2023, the supply volume amounted to 2.8 mln m². It is worth noting that the current supply volume in the housing market is the highest in the last three years but does not exceed the pre-Covid period (2016-2019) when the supply volume was at the level of 3 mln m². In the first three months of 2023, the figure showed a slightly positive trend of 3%, the lowest increase in the last year.

“The low growth in supply is primarily due to relatively little development activity – the introduction of new projects to the market. For instance, in the first three months of the year, only seven new projects opened for sale, while in the same period of 2021 and 2022, twice as many projects entered the market. A comparable number of objects (8) were launched in 2020,” explains Evgeny Mezhevikin, Analytics and Marketing concepts Executive at PIONEER.

The company also calculated: in Q1 2023, the demand for new buildings was about 660 thousand m², comparable to the results of the Q4 of last year. In a year-on-year comparison, there is a significant demand reduction of 31% due to rush figures of Q1 2022.

At the same time, a gradual reduction in the share of mortgage transactions on the new builds market has been recorded. From its peak of 80% last December, the share of transactions involving credit has gradually fallen to 71% this year (in March 2023).