Nearly five million square meters (sqm) of housing space was completed in Moscow in 2019, which is up by 40% year-on-year and represents the best result in 55 years, the Russian capital’s deputy mayor Marat Husnullin told Vedomosti.
According to analysts and official data, Moscow’s real estate sector is coming back to life, with previous reports from 2019 showing housing completions tripling in the first half of last year.
Husnullin said 2019’s results were the “highest level of residential construction since the 1965 mass housing blitz carried out by Secretary Nikita Khrushchev.”
The expansion of the administrative borders of Moscow in 2011-2012 and the inclusion of the so-called New Moscow accounted for 3.86 million sqm of the housing completed in 2019, with 1.1 million sqm built in the former borders on the capital.
The renovation program launched by the city also helped boost the construction, with 45 buildings of over 1 million sqm area completed under the initiative and another 60 planned for 2020.
Another reason for the rapid growth of the market is attributed to developers front-loading their construction plans in 2016-2017 ahead of the escrow account reform of the real estate financing passed in 2019, according to bne Intellinews.
On the demand side, the housing construction was supported by cheaper mortgage loans, with the interest rates for mortgages going below 10% and banks issuing a record-high 1.5 million mortgages in 2019.
The prices for housing in Moscow, however, also rose, with the average price for sqm in new projects rising by 7.1% to 248,000 rubles in 2019, Vedomosti wrote citing estimates by real estate consultancy Est-a-Tet.