Moscow has the second fastest rising prices for luxury apartments in the world

Moscow has the second fastest rising prices for luxury apartments in the world
The cost of luxury apartments in Moscow were up 12% in 1Q19, behind only Berlin's 14% / wiki
By bne IntelliNews May 31, 2019

Moscow has the second fastest rising prices for luxury apartments in the world, according to a survey by real estate agent Knight Frank, reported Kommersant on May 30.

The Russian real estate market has been depressed for about five years since the economy experienced a number of shocks, including the 2008 global financial crisis followed by a steep devaluation of the ruble after oil prices collapsed at the end of 2014.

However, as bne IntelliNews recently reported, the real estate market has begun to revive on the back of a nascent economic recovery and luxury housing is leading the way.

Knight Frank’s Prime Global Cities Index (PGCI), a quarterly survey of property prices, found that between January and March this year the cost of luxury housing in Moscow increased by 12% compared to the first quarter of 2018. Only the German capital of Berlin has seen a faster increase in prices, which were up 14.1% in the same period.  The increase in the absolute cost of luxury accommodation has seen Moscow move up the PGCI ranking by 34 positions in the last year.

According to Knight Frank, the average cost of luxury housing in the primary market now amounts to RUB815,000 ($12,472) per square metre. 

Price rises in the elite segment of the luxury market – top end apartments for millionaires – rose even faster and were up 22% in the same period, according to Knight Frank.

Price growth in the more modest business class housing are growing a lot more slowly and were up 3% to an average price of RUB268,000 per square metre. 

The increases in price at the top of the market are limited to Moscow. In Russia’s second largest city St  Petersburg prices for luxury housing fell by 0.3% y/y in the first quarter. 

Knight Frank CEO in St. Petersburg Nikolai Pashkov, as cited by Kommersant, explained the fall saying it was due to a marking down of properties that had been on the market a long time.

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