Overview of Moscow’s residential housing market

Comfort-class

Comfort-class housing is the key real estate segment within the “old Moscow” area. The demand for comfort-class flats surged in 2020 driven by lower mortgage rates and the subsidised mortgage programme available to borrowers. The new housing hitting the market helped offset the strong demand, keeping the total supply at 2020 levels.

Supply and demand in Moscow’s market of new comfort-class housing, thousand sqm
Sources: newly built housing database, Rosreestr, Company’s proprietary databases

the share of sales of new comfort-class housing funded by mortgage loans increased by 20 p.p. since 2018. This growth was driven primarily by lower mortgage rates and availability of the government-subsidised mortgage programme. According to INTECO estimates, about 80% of all mortgage transactions in the comfort-class segment were based on subsidised rates.

Share of mortgage transactions in the comfort-class segment, %
Sources: newly built housing database, Rosreestr, Company’s proprietary databases

Reduced mortgage rates boosted demand in comfort-class causing prices to surge by 15.9% in 2021. In the reporting year, the offer price reached an all time high of RUB 273 thousand per sqm.

Average selling price per sqm of new comfort-class housing in Moscow, RUB thousand
Sources: newly built housing database, Rosreestr, Company’s proprietary databases

In terms of supply and demand structure, property distribution by area is fairly even — supply is matched by demand for properties with an area of up to 30 sqm and those of 30–40 sqm. Smaller properties were in greatest demand and attractive in terms of return on investment.

Сomfort-class housing with an integrated fit-out also enjoyed a strong demand, which increased by 12 p.p. year-on-year.