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17.04.2013 Forecast of the cost of real estate property, its buying, selling and rent in 2013
Over the past three years following the crisis one of the most discussed topics among the Russians is the rising cost of real estate.

After the start of a gradual rise of apartment prices in the beginning of 2011, especially in big cities, citizens have ceased to hope for the stagnation of the market and cost reduction.

According to leading experts in the real estate market of St. Petersburg, the rise in house prices will continue throughout 2013. It is assumed that this growth will be steady, without any dramatic upturns and stagger similar to the period of 2011-2012.

It should be noted that the rising cost of apartments in Moscow and St. Petersburg is significantly higher comparing with other Russian towns. The increase of price in the summer of 2013 may get to about 3-5 % in Russian metropolitan cities.

Taking Moscow as an example, we observe that at the end of 2012 price for "comfort" class segment was 170 thousand rubles per square meter and by the end of 2013 it’s expected to grow to about 200 thousand rubles per square meter, and in the segment of "luxury" property - 400-500 thousand at the beginning of 2013 and 550-700 thousand by the end of 2013.

It is difficult to make such predictions for the regions of Russia, taking into account heterogeneity of cities and regions. In particular, there is now a substantial increase in the prices of apartments in Sochi, where the 2014 Winter Olympics will be held.

Significant price growth (especially for luxury properties) is observed in the oil-producing areas (Tyumen, Surgut, etc.). At the same time, in the central part of Russia (the cities Omsk, Perm, Tula, Orel, etc.) housing prices haven’t almost changed for the past 2-3 years. Slight variations occur in the range of 3% to an increase or decrease.

Forecast of growth of apartment prices in 2013 in Moscow

For the citizens of Moscow 2012 is remembered by one of the most important events - the expansion of the boundaries of the city. Shrewd realtors benefited from this situation even before the official expansion of the boundaries of Moscow. Thus at the end of 2011, prices on real estate in Old Moscow rose significantly, while in New Moscow accommodation it was possible to purchase real estate property quite profitable. The fact is that the new houses didn’t yet have sufficiently developed infrastructure, driveways were not arranged, not enough parking spaces were provided, and there were few shopping centers, social and cultural facilities and entertainment.

In the course time the situation began to change gradually. Development companies started exploring new territory, expanding infrastructure of New Moscow.

Independent investors who consider investing in the infrastructure of new buildings are ready to actively develop this segment of New buildings of Moscow. As a result, it’s expected that the prices for apartments in new areas of Moscow will grow during the whole 2013.

While prices in the segment of primary housing were still relatively affordable, there was a certain boom for new buildings in New Moscow, especially at the time of the last presidential election. Citizens did everything to buy an apartment in New Moscow at competitive prices, using the mechanisms of mortgage lending.

In the current 2013 such a stir is not likely to be expected, since some categories of citizens are still low paying, so prices for primary and secondary real estate market will grow gradually and smoothly.

It should be noted that in the period of 2011-2012 the prices in the secondary market of Moscow also grew slowly and not very actively. This is due to the introduction of large amounts of housing in the primary market. So, for example, by the end of 2012 the prices of apartments in new buildings segment increased by 12.4% in a year, and in the segment of the secondary housing – only for 7.1% in a year.

Experts predict a significant rise in prices in the first and second quarters of 2013 in "comfort" and "business" segments (between 120 and 190 thousand rubles per square meter, respectively, to 150 - 220 000 at the end of 2013). At the same time, there is a decline in prices for apartments in the segment of "economy class" (up to 5% compared with the same period in 2012).

Deterrent of growth of prices for apartments in Moscow and St. Petrburg

According to analysts the growth of real estate prices in the primary market of Moscow and St. Petersburg may be stabilized by means of government programs supporting the acquisition of property, as well as more affordable mortgage programs for borrowers.

If the prices in Moscow will be held at the level of 2012, and their growth is not more than 7-10%, this can be considered as a certain stabilization of the market.

Like in the pre-crisis period (2003 - 2007 year), experts correlate prices of real estate property with the cost of oil in Europe and the world. The stabilization of oil prices in 2013 will result in a more stable indicators of property cost.

Forecasts of the residential rental market in Russia in 2013

Every year the demand for rental housing among Russians and foreigners increases, especially in the segments of "elite" and "business class". This is most clearly seen in the example of Moscow. Thus the cost of flats rented out for a period of one to six months has increased by 4-6%, while the price for apartments for long term lease (one year or more) - an average of 2-4%.

In 2013 it’s expected that prices for rent of basic type and cheap apartments in Moscow and St. Petersburg will increase by 5-7%, rent of elite and luxurious housing - by 3-5%, which corresponds to the average rates of growth of the cost in 2012.

Dynamic development of society, dedication for civilized business have made the housing market in Moscow and St. Petersburg similar to the European in terms of prices, supply / demand and quality characteristics.

Especial influence on the pricing of the housing market has location of an estate property, its quality, availability of infrastructure, developed transport system.

In big cities there’re almost no long term constructions, the number of construction companies grows, which leads to a rapid increase in the rate of new construction, geographical expansion of offers.