In the premium segment, the newly built housing supply increased by 53.8% year-on-year due to major projects entering the market. The new projects failed to offset the significant shortage of properties in the second half of 2020, which resulted in decreased supply in the market.
Supply and demand in Moscow’s market of new premium-class housing, thousand sqm
Sources: newly built housing database, Rosreestr, Company’s proprietary databases
In 2021, demand for premium projects declined by 1.3% year-on-year, which was partially due to the reduced mortgage rate. Customers in the premium segment were increasingly taking mortgage loans to buy housing, with the share of such transactions over four years rising by 8 p.p. to 31% in 2021 vs. 23% in 2018.
Throughout the reporting period, there was a 10–17% differentiation between the demand price and the supply price. The price for premium-class housing increased by 21.1% in 2021, which exceeds the 2020 growth rate by 11.8 p.p.
The share of demand for small premium-class properties of up to 80 sqm in the overall supply and demand structure (44%) is higher than that of supply (35%). This means that the new housing supply does not fully meet the customer expectations — there is no trend for large properties, with functional layouts being more popular. The 100–150 sq m range is the only large property range where supply and demand meet the customer expectations.
In 2022, developers may stop offering fitted-out and white box properties, facing an increased risk of failing on their obligations to customers.
Share of mortgage transactions in the premium segment, %
Sources: newly built housing database, Rosreestr, Company’s proprietary databases
Average selling price per sqm of new premium-class housing in Moscow, RUB thousand
Sources: newly built housing database, Rosreestr, Company’s proprietary databases