Property prices have dropped 25% in Moscow in the downturn and rents are down by up to 50% but the real estate market is now poised for a recovery, it is claimed.
Industry commentators are also pointing out that credit crisis has weeded out the poorer operators and with GDP expected to grow by 3% in 2010; buyers are at least showing signs of returning to the property market with real estate players seeing signs of activity.
Before the global downturn the real estate market was booming in Russia with luxury apartments in the capital city selling for between $15,000 and $40,000 per square meter depending on location. The average price per square meter was $6,500 per month but at the top end $20,000 per month was possible.
Prices were driven upwards by a lack of quality accommodation but the credit crunch has had a profound effect. Unemployment affected the low and middle end and those who would normally buy at the luxury end of the market just seemed to disappear.
Real estate agents report that the market started slowing at the end of 2008 and accelerated through to March. ‘Demand was very, very low, especially on the sales side and across all budgets,’ said Maxim Mokeyev, executive director of Evans Real Estate.
