RUSSIA
UKRAINE KAZAKHSTAN
Expat Housing Overview: RUSSIA AND CIS AZERBAIJAN GEORGIA
BELARUS
A Message From Expat Moscow Housing Market CIS Housing Market Legal News H1 2016
Contents A Message From Expat
1
Russia Moscow Housing Market
2
Key Legal Reforms
9
Kazakhstan Astana Housing Market
10
Ukraine Kiev Housing Market
11
Belarus Minsk Housing Market
12
Azerbaijan Baku Housing Market
13
Georgia Tbilisi Housing Market
14
Map of Housing Market
15
About Intermark New Services
17
New Materials
18
A Message From Expat Fernanda Ravazzolo Friend of Intermark from Brazil
«After almost a year of living in Moscow, I’m delighted with the city and have a great time here!»
When I heard for the first time that I needed to relocate to Russia, I was really shocked because I never imagined living in Moscow. Our cultures are so different that I couldn’t realize how my family would adapt to these traditions and customs. I remember I called my husband to talk about the news that we would be relocated to Moscow and asked him: “Guess where we will be moving?” He mentioned around 10 countries but did not name Russia at all. Because it seemed really incredible! My family and I are from Brazil and before relocating here we had spent 18 months in Lima, Peru. Having lived in Latin America all my life, I admit that I knew very little about Russia and the Moscow lifestyle. I am a big fan of Tolstoy’s books, Tchaikovsky’s music and the Dr Zhivago film. And that was all I knew.
people. In Brazil, you can make a friend for a life in a five-minute conversation in the lift. However, I believe it is a matter of adapting and respecting the culture. We can all get along very well together. I just learned that if a Russian does not smile at you, it is because of their nature. It does not at all mean that they do not like you. My kids love being here in Moscow. They adapted extremely fast. Their favorite activity in winter is to play outside in the snow. It does not matter if it is 0ºc or –20ºc, they have a great time snowboarding and building snowmen. In Moscow I like to visit museums and going out for a walk - it is our favorite thing to do. The Moscow metro is outstanding and you can go everywhere! I have also been to the Bolshoi Theater and seen Swan Lake. It is astounding! And, of course, Moscow is a very beautiful city. I love walking around Red Square, downtown and across the river. It has an incredibly huge amount of things to do, such as theaters, museums and restaurants. I also love how the city changes with each season. The winter has been a great experience for us as well. As Brazilians, we are experiencing temperatures that we never had before and we had to learn how to dress for the new weather.
“I felt like a child playing spy games and deciphering codes!”
I remember myself trying to read all the signs in Russian while driving around Moscow. In addition to that, I had a lot of fun after learning that the Cyrillic alphabet is not so difficult. I felt like a child playing spy games and deciphering codes! It is really a funny exercise! The main difference between Russia and Brazil is the way that people interact with each other. Russians do not smile much and are very reserved
1 www.intermarkrelocation.ru
Moscow Housing Market Marina Morozova Project Manager / Senior Relocation Consultant
[email protected]
“The first half of 2016 brought sufficiently high activity from potential tenants and landlords on the high-budget rental market in Moscow. Tenants responded positively to the decrease in ruble rates, showing a real interest in choosing apartments based on both quality and value. Landlords were flexible and willing to make concessions in order to conclude an agreement before the summer. It is no coincidence that the past quarter has demonstrated the strongest demand in recent years. This allows us to face the future with confidence and positively assess the prospects of this market segment."
Dynamics
Supply The volume of supply on the high-budget rental market decreased by 12% in H1 2016, but furthermore this indicator remained relatively stable in Q2 2016, showing only minor fluctuations (up to 5%). It should be noted that, for the last two years, the number of high-budget apartments for rent in Moscow increased by more than 20% and in January–February 2016, Intermark recorded the highest volume of supply since November 2009. 140% 120% 100% 80% 60%
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Location
Chart 1.1 Dynamics of the supply of Moscow’s prime rental market (January 2015 – 100%)
Currently, the Arbat-Kropotkinskaya area has the highest number of vacant high-budget rental properties (21% of the whole high-budget supply). Arbat-Kropotkinskaya Tverskaya-Kremlin Zamoskvorechye
21% 18% 9%
Leninsky Prospect Lubyanka-Kitay-Gorod Krasnopresnenskaya Leningradsky Prospect Tsvetnoy Boulevard Patriarshie Prudy
7% 7% 7% 5% 4% 3% 3% 3% 2% 2% 1%
Chart 1.2 Analysis of the most popular areas in terms of supply 2 www.intermarkrelocation.ru
Russia
Kutuzovsky Prospect Frunzenskaya Kuntsevo Prospekt Mira Other Taganskaya
8%
Location
Since the beginning of 2016, the volume of supply has decreased by almost 20% on average in 7 of 14 Moscow areas. Tverskaya-Kremlin (–32%), Patriarshie Prudy (–29%) and Zamoskvorechye (–23%) recorded the biggest take-up. On the other hand, the highest increase of supply was noted around Leninsky Prospekt(20% more vacant apartments in June 2016 than in January). Leninsky Prospect Prospekt Mira Tsvetnoy Boulevard Frunzenskaya Leningradsky Prospect Taganskaya Lubyanka-Kitay-Gorod Other Kuntsevo Krasnopresnenskaya Arbat-Kropotkinskaya Kutuzovsky Prospect Zamoskvorechye Patriarshie Prudy Tverskaya-Kremlin
20% 9% 6% 6% 5% 5% 4% 0 -7% -9% -14% -16% -23% -29% -32% -40%
-30% -20%
-10%
0%
10%
20%
30%
Number of rooms
Chart 1.3 Supply volume growths by area, H1 2016 Nearly two-thirds (65%) of high budget properties for rent are two- and three-bedroom apartments (35% and 30% respectively). One-bedroom (16%) and 4+ bedroom apartments had nearly equal market shares (17%). 17%
2% 16%
30%
35%
Studio 1 Bedroom 2 Bedrooms 3 Bedrooms 4+ Bedrooms
Budget
Сhart 1.4 Supply analysis of expat housing in Moscow in terms of number of rooms In the first half of 2016, the average supply budget for high-budget rentals was $4,750 per property per month, which is 11% higher than in January. By the end of June 2016, more than one-third of high-budget apartments were on the market for $2,000 – $4, 000 per property per month. Rental rates under $2,000 and above $4,000 were distributed rather evenly (22% and 17% respectively). Only 2% of high-budget rentals were on the market for $15,000 per property per month.
5%
6% 2% 22%
Russia
11%
17% 37%
< $2000 $2000-$4000 $4000-$6000 $6000-$8000 $8000-$10000 $10000-$15000 > $15000
Chart 1.5 Supply analysis of expat housing in Moscow in terms of rental budget
3 www.intermarkrelocation.ru
Dynamics
Demand The second quarter of 2016 recorded the most tenant demand: 6% higher than in March, marking its highest point since the end of 2013. According to our assessment increase of deals in foreign corporate client segment in the first half of 2016 was about 20%, compared to the same period of the last year. At the same time the profile of potential tenants underwent considerable changes. The majority of growth of demand is accounted for requests from Russian tenants who are actively using market conditions to improve their living standards. 100% 90% 80% 70% 60% 50% 40% 30% 20%
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Number of rooms
Chart 2.1 Dynamics of the demand of Moscow’s prime rental market (January 2014 – 100%) Tverskaya-Kremlin is the most popular area (11% of the total number of queries), followed by Leningradsky Prospect, Zamoskvorechye and Lubyanka-Kitai-Gorod (10% of total queries respectively). ArbatKropotkinskaya came in third (9%). Demand for two-bedroom apartments was stable (about 35% of all queries). Approximately 30% of potential tenants were interested in one-bedroom apartments. Studios (16%), 3-bedroom apartments (13%) and spacious apartments with 4+ bedrooms (6%) were the least popular with tenants. 6%
13%
16%
30%
35%
Studio 1 Bedroom 2 Bedrooms 3 Bedrooms 4 Bedrooms
Budget
Chart 2.2 Demand analysis of expat housing in Moscow in terms of number of room Since July 2015, the average tenant budget has lost $2,000 (38% lower) and is now $3,650 per property per month. By the end of June 2016, more than one-third of tenants are interested in apartments renting at $2,000 per property per month and almost 30% of requests were for budgets ranging from $2,000–4,000 per property per month. The smallest share of tenants is composed of those with $8,000+ per property per month (11% of demand). 5%
5% 1% 37%
14%
29%
Chart.2.3 Demand analysis of expat housing in Moscow in terms of rental budget 4 www.intermarkrelocation.ru
Russia
9%
< $2000 $2000-$4000 $4000-$6000 $6000-$8000 $8000-$10000 $10000-$15000 > $15000
Supply – Demand Correlation supply
demand
160% 140% 120% 100% 80% 60% 40% I
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VIII
IX
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XI
XII
I
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III
2015
IV
V
VI
2016
Dynamics of the supply and demand of Moscow’s prime rental market supply 37%
demand
37% 29%
22%
12%
9% 4%
2%
0-
0 00 15
$1
$8
00
00
1%
>$
$1
15
00
00
00
0 $6
$4
00
00
0-
0-
$8
$6
00
00
0 00 $4 000 $2
