According to the real estate consultancy’s report, which covered the first quarter of this year, out of 45 major global cities, only Berlin has a higher luxury apartments price growth rate than Moscow.
The average cost of luxury housing in the primary market now amounts to 815,000 rubles ($12,472) per square metre, the survey’s results showed. Price rises in the elite segment of the luxury market – top end apartments for millionaires – rose even faster and were up 22% in the same period, according to Knight Frank.
The Russian real estate market has been depressed for about five years since the economy experienced a number of shocks, including the 2008 global financial crisis followed by a steep devaluation of the ruble after oil prices collapsed at the end of 2014. However, luxury housing is leading the market’s revival on the back of Russia’s shy economic recovery.
Knight Frank’s Prime Global Cities Index (PGCI), a quarterly survey of property prices, found that between January and March this year the cost of luxury housing in Moscow increased by 12% compared to the first quarter of 2018. The increase in the absolute cost of luxury accommodation has seen Moscow move up the PGCI ranking by 34 positions in the last year.
Price growth in the more modest business class housing are growing a lot more slowly and were up 3% to an average price of RUB268,000 per square metre.
The increases in price at the top of the market are limited to Moscow, the survey showed. In Russia’s second largest city, St Petersburg, prices for luxury housing fell by 0.3% y/y in the first quarter.