According to a new study by Knight Frank consulting company, prices for luxury residential property in Moscow are the fastest growing of all European cities.
The study reveals that in Moscow, average prices for prime real estate have grown 28.6% over the past five years, in contrast to 24.9% in London and 23.6% in Paris. Analysists believe Moscow is leading the pack at this point in part due to the relatively short time that it has been a player on the high-end market.
Yelena Yurgeneva, regional director of residential real estate at Knight Frank Russia & CIS, said, “London and Paris [real estate] markets formed a long time ago, but Moscow’s market is new.” She also notes that despite the boom, Moscow’s capital remains a relatively local market with around 90% of people who buy luxury residential property in the capital are locals or ethnic Russians from abroad.
Due to the fact that investors are often required to pay the full price in advance on luxury properties in Moscow, even while they are still in their initial construction phase, Moscow is not very attractive to foreign buyers.
Prime luxury real estate in Moscow is typically purchased in the neighborhoods of Kropotkinskaya, Mayakovskaya, Polyanka and Pushkinskaya, where famous residents like Russian diva Alla Pugacheva, director Nikita Mikhalkov and television showman Andrei Malakhov own property.
Despite Moscow’s fast-growing prices, prime real estate in London and Paris is still more expensive per square meter, but Moscow will likely catch up to cities like new York and Paris within the year. Reaching London’s prices, which are the world’s most expensive at $51,590 per square meter, will likely take up to five years.
On a global scale, the only cities that are seeing prime real estate prices rising faster than Moscow are Asian cities like Jakarta, Beijing, Hong Kong and Shanghai.