Residential Real Estate Market Overview H1 2012

According to Rosstat data, 15.8 mln. sq.m. of residential premises were introduced to the market within the territory of the  Russian Federation. The Krasnodar Kray became the leader by delivery volumes for the first five months of 2012. The Moscow region took the second place and the Tatarstan Republic ranked third—0.91 mln. sq.m.

In Moscow, according to preliminary data, 630 thous. sq.m. were introduced to the market for H1 2012, which was 28% lower than the last year indices. 

By the results of Q2 2012, the supply volume in the primary market increased almost by 20% and amounted to 1.1 mln. sq.m. (taking into account apartments and elite new buildings1) or 237 properties.

During H1 2012 more than 40 new properties (residential houses, buildings in the structure of RC) entered the market, which is the maximum indicator for the post-crisis period. New supply volume reached almost 430 thous. sq.m., almost 40% of which belong to the business class segment, 25% of new supply—comfort class residential space, 20% - elite, a little bit more than 10% - economy class share, the rest 6% - apartments (business and elite class).

At the beginning of 2012 the demand for residential space in Moscow was at the high level, characteristic of the active market. According to Rosreestr administration data, 44 382 transactions with residential real estate were registered in the capital in H1 2012. A number of registered deals displayed growth versus the indices of 2011, nevertheless, the paces of this growth (+5% versus H1 2011) fall behind the pre-crisis ones, which is indicative of the fact that the market is going through the main recovery stage. The main growth, as in 2011, took place due to the development of mortgage lending: the increase of transactions with mortgage turned out to be much more considerable than the total increase of a number of deals. 

The average supply price in the primary market by the results of Q2 2012 reached 189, 772 rub. per sq.m. (exclusive of elite segment, apartments and townhouses), the equivalent in dollars—$5, 840 per sq.m. The decline of ruble price versus Q1 posted –1.6% in rubles, minor growth at the level of +2.6% is observed since the beginning of the year. The dynamics of the average price in dollars (-11% versus Q1 and +2% versus the beginning of the year) is conditioned by tangible weakening of ruble rate against dollar.

In H1 2012, the growth of the average price at the level of 0.5-2% per month was observed in the secondary residential market of Moscow. For six month the average ruble price gained 7% and settled at the level of 200 thous. rub. per sq.m. (with account of elite segment). The dollar price gained 10% for Q1 2012, however, it decreased in Q2 under the influence of exchange rate.  

During Q2 2012 the primary market of apartments increased by three new properties. All in all, 9 apartment complexes entered the market since the beginning of the year. By the end of June 2012, approx 142.6 thous. sq.m. were offered in 25 complexes in the primary market of apartments. The growth of supply volume in this segment for H1 posted about 30%. The average ruble price in the primary market of apartments was 12.7% up by the results of Q2 2012 and amounted to 329, 080 rub. per sq.m. The dollar price gained 1.9% and reached $10, 130 per sq.m. The ruble price increased by 12.6% and the dollar price grew by 9.5% for H1.

In H1 2012, the elite primary market was actively increasing by new properties, as the result, the supply volume in this segment of the market increased by one third. The main growth was observed in Q2. All in all, 7 new properties entered the market since the beginning of the year. By the end of H1 2012 the supply volume in the elite primary market of Moscow amounted to 1, 030 flats in 41 complexes (about 190 thous. sq.m.). Elite residential space buyers’ activity was at the high level by the end of H1 2012. The average price in the elite primary market settled at the level of $19, 050 (619.1 thous. rub.) by the end of June 2012. In the secondary market flats were offered at the price of about $23, 940 (778.1 thous. rub.) per sq.m. By the results of H1 the average dollar prices posted 0.5-1.5% growth and the ruble prices—2.5-3.5% growth.

During H1 2012 the fluctuations of the elite rental market suffered seasonal factors. Still, the demand was stably high during the whole period. By the  results of H1 2012 the average level of rental rate constituted $8, 400 per flat per month, reaching the level of the indices of the end of 2011. The decline for Q2 constituted 2.3%, the growth for the year posted 1.2%.

Activity of elite cottages market was high during the past period. However, the main peak was observed at the beginning of the year. The demand was high during the whole period. By the results of H1 2012, the average level of rental rate in the elite countryside rental market reached the index of $16, 500 per house per month. The growth for H1 constituted 3%, the annual growth reached 14%.

The trend of supply volume growth is preserved in the primary market of the Moscow region - new offers appeared at 193 addresses in Q2 2012 (16% of the total number of new buildings in supply), and the supply volume, as of the end of June 2012 amounted to 1 184 houses (the increase for Q2 2012—11%), where approximately 39 980 flats were displayed (the increase versus March 2012 - 9%).