House prices rallying

2010-01-11

The rate at which housing prices in Russia have been falling is gradually abating, a possible sign of the long-awaited stabilisation on the market.

First signs of stabilisation

Between the onset of the financial crisis in the autumn of 2008 and mid-November 2009, the rouble prices of 1 m² of housing on the secondary market in Russia fell by 24%, and between January and November 2009 the reduction was close to 20%, according to the latest report from the Association of Russian Builders (the ASR). Whereas in July 2009 there was an average 2.2% month-on-month reduction in prices, in subsequent months the decline became gradually less acute, with prices in November falling by only 0.3% in comparison with the October figures. A similar situation was observed on the primary market. Whereas the average price of 1 m² of new housing has fallen by 17% since the autumn of 2008, during the first eleven months of 2009 a 13.7% fall was reported. The reduction in the rate at which the falls have been taking place suggests price recovery and imminent stabilisation on the housing market. The first month-on-month increase in prices should be expected in the next few months.

Cheapest flats found in Ingushetia

In mid-November the average cost of 1 m² of housing in prefabricated residential buildings in Russia was RUB 41,125 (€961) on the secondary market and RUB 36,864 (€862) on the primary market. At the same time the construction cost of 1 m² came to RUB 34,204 (€800).
The most expensive apartments are traditionally those of Moscow and St. Petersburg. For 1 m² of housing on the secondary market in Moscow one has to pay RUB 122,000, or €2,852, and in St. Petersburg the figure is RUB 82,281, or €1,923, but in both cities the cost of housing on the primary market is approximately RUB 10,000 less. It is worthy of note that prices in Russia’s capital are double the actual construction cost of the apartments.
The cheapest places for buying an apartment are the republics of Ingushetia and Karachay-Cherkessia, along with the Kursk Province, in these regions prices on both the primary and secondary markets significantly exceed the Russian average but are no more than RUB 28,000 (€655) per m².

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 This figure includes the cost of land, building design and construction and assembly work.