Housing sales in St. Petersburg and its suburbs in the first half of 2016, according to preliminary estimates, increased by 15% compared to the first half of last year to 1.7 million square meters. m, analysts at Knight Frank St Petersburg estimated. According to preliminary data from the consulting center (CC) “Petersburg Real Estate”, at the end of the first half of the year the level of demand in the market showed an increase of within 10% compared to the same period last year. The reason is the low base, which was a consequence of high mortgage rates at the beginning of 2015: on average at 16% per annum, recalls Olga Trosheva, head of the Petersburg Real Estate CC.

The second quarter of this year turned out to be weaker than the first - housing sales in physical terms in April-June decreased compared to January-March by 28% in economy class, by 23% in business class and by 25% in suburban areas, Knight calculated Frank St Petersburg. The exception was the elite segment, which grew quarter-on-quarter by 65%, but in the first half of the year decreased by 23% compared to the same period last year. It is still difficult to say whether this is a trend and the market is moving down or a temporary decrease in activity after high demand at the beginning of the year, says Nikolai Pashkov, CEO of Knight Frank St. Petersburg.

He explains the active demand in the first quarter by the risk of canceling the subsidized mortgage rate, which pushed buyers to conclude transactions. In addition, according to Pashkov, in the first quarter the dollar exchange rate was high - people sold foreign currency and invested in housing.

This year the supply has been reduced. According to Knight Frank St Petersburg, a total of 4.1 million sq. m. were on sale in the first half of the year. m of housing under construction, compared to the same period last year, this figure decreased by 11% (then it was 4.6 million sq. m). Supply in the suburbs and region reached 1.6 million sq. m. m, exceeding the supply of economy-class housing in the city (1.5 million sq. m), analysts at Knight Frank St. Petersburg note. Over the six months of 2015, 2.2 million square meters were brought to the market. m in new projects, and this year, according to preliminary estimates, 1.9 million sq. m. m, Trosheva calculated.

Active investors
The volume of investment transactions in the St. Petersburg real estate market, according to JLL, in the first half of the year reached $100 million compared to $53 million for the same period last year....
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Active investors

The volume of investment transactions in the St. Petersburg real estate market, according to JLL, reached $100 million in the first half of the year compared to $53 million for the same period last year. The share of St. Petersburg in the total volume of investment transactions on the Russian real estate market for six months was about 6% versus 5% last year.

The situation is developing according to the 2015 scenario - developers are starting new projects more cautiously, and some are revising or suspending the construction of projects, says Alexey Gusev, commercial director of Glavstroy-SPb. But Glavstroy-SPb, according to him, has not changed its plans and is going to increase construction volumes. Sales of Glavstroy-SPb in the first half of the year, according to Gusev, amounted to about 130,000 sq. m. m, this is comparable to the level of the record year 2014. He did not notice any surges associated with the unstable economic situation: “People were actively buying real estate.” Despite the decline in the solvency of the population, purchasing activity in 2016 is significantly higher than in 2015, says Elena Valueva, Marketing Director of Mirland Development Corporation. In Mirland's Triumph Park project, demand for apartments increased by 36%, she adds. According to Valueva, the share of mortgage transactions has also increased significantly, which is associated with the extension of the preferential mortgage rate for this year. In the first half of the year, the share of transactions involving a mortgage loan from developers was 64%, which is 18% more than a year earlier, says Valueva. The demand for mortgages is high; more than half of the RBI holding's transactions involve loans, the holding's president, Eduard Tiktinsky, said through a representative.

Average prices for housing in mass demand have remained stable since the beginning of the year; the cost of apartments is still growing along with the stage of readiness of the house, says Trosheva. According to Knight Frank St Petersburg, prices in economy class have decreased slightly. Thus, the average cost of housing in economy class in the second quarter dropped by 2% in the city (to 94,907 rubles per 1 sq. m.) and by 3% in the suburbs (to 64,000 rubles per 1 sq. m.). Only luxury apartments increased in price – by 6% over the last quarter (up to RUB 357,606). Prices for primary real estate will gradually increase due to a decrease in supply on the market and increased construction costs, Valueva is sure.

The average price is a conditional concept that is associated with the stage of construction and demand for the object, says Tiktinsky. RBI increased prices for a number of properties; on average, the price increase in the company's houses was about 6%, he added. The unstable economic situation has changed consumer preferences; now, while maintaining the same number of rooms, buyers choose apartments of smaller footage, Valueva notes.

Active investors The volume of investment transactions in the St. Petersburg real estate market, according to JLL, in the first half of the year reached $100 million compared to $53 million for the same period last year.... Read in full

Active investors
The volume of investment transactions in the St. Petersburg real estate market, according to JLL, in the first half of the year reached $100 million compared to $53 million for the same period last year....
Read in full

Demand for housing in St. Petersburg is no longer growing