Analysts from Rosgosstrakh insurance company predict that Moscow real estate prices will begin to grow again only in Spring or Summer 2008, as the market has an excess margin of unsold properties. In a more distant future, the market will ‘cool down’, as migration to the city slows down and quality of life in Moscow worsens. Market players seem not to believe the forecast.
Rosgosstrakh analysts thing the excess of properties will influence realty market in the near future, pushing the prices down. The margin is enough to satisfy a year’s demand for apartments, their report states. Selling all the properties will require at least 100,000 purchase deals a year, while only 75,500 such deals were registered in Moscow in 2006, and only 70,000 will take place this year, the analysts said.
Realtors seem to be taken aback by the insurance agency’s forecast. They doubt the authenticity of figures mentioned in the report and say that construction of new homes will soon drastically decrease.
Irina Naumova from Peresvet-Invest company believes the notion of an excess of unsold real estate in Moscow is a ‘myth’. She said there really were non-liquidable apartments that were not possible to sell for years, but they don’t comprise a large segment of the market. Vladimir Lutskov from Miel real estate company agrees with her, citing a 20 percent offer deficit on primary real estate market.
Most property traders say prices have begun to grow again, despite Rosgosstrakh’s predictions that they will soon decrease by 10 or 15 percent. Gennady Sternik, a renown real estate market analyst, has recently published his own forecast, saying in 2008-2009 prices of properties in Moscow will double, and average price of a square meter may become as high as 8,000 dollars. After 2009, he said, flats in Moscow will go up in price by 20 to 25 percent a year.
Rosgosstrakg analysts say quality of life in Russia’s regions keeps growing, and deteriorating the capital. They think Moscow is an uncomfortable place for living, citing The Economist’s rating where the city can be found among places like Tripoli and Managua in terms of level of life. Moscow is ‘too expensive, insecure and overcrowded’ to be an attractive city, and many provincial businessmen prefer to buy real estate in their home cities or abroad, where homes are cheaper and higher in quality.
Aleksandr Kudryavtsev from MIAN real estate agency agrees that the number of buyers from regional centers has dropped down by 5 percent recently. All realtors know that sooner or later life level in the regions will grow, but doubt Russia will follow the US model, where many cities ‘can compete with the capital in both income and investment’, Mrs Naumova believes. So far, migration to Moscow from other parts of Russia is on the rise. More than 61,000 people moved to the city in 2006, compared to 51,000 in 2005.
Ilya Stupin
Photo: Comstock complete / Fotolink
http://eng.expert.ru/
