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A sign touting apartments for sale. The crisis has seen property values fall by over 35 percent since last October.
The average price of Moscow real estate on Monday was $3,930 per square meter, according to research portal IRN.ru. Last week, the average price was $3,957 per square meter, lower than the support level of $4,000 per square meter set two years ago.
The decline continues a negative long-term trend for real estate prices, which have crept lower week by week after hitting a high of $6,122 per square meter last October, when the property market first began feeling the effects of the economic slowdown.
Although part of the price drop was because of the ruble rising against the dollar, the overall downtrend is because of cash-poor consumers and a dried-up mortgage market, said IRN.ru head Oleg Repchenko.
Less-expensive properties led the decline, with more expensive offers following suit after holding steady during the first few months of the year.
The level of $4,000 per square meter is important as a symbolic barrier because that is where prices halted their decline during a brief correction in 2007, Repchenko said.
Some market players said an accurate picture of the city’s real estate prices cannot be given without including the elite segment, which the study omitted.
“We work in this segment, so we think it is necessary to take into account offers for elite real estate,” said Valery Barninets, head of Doki realty.
According to data compiled by Doki, economy-class offers start at as low as $3,800, business-class offers at about $6,000 and elite offers start at $12,000, Barninets said.
Using Doki’s statistics, the average price for a square meter of Moscow real estate, including elite properties, would be $7,266.
Repchenko, however, was quick to defend his methodology, saying elite realty would skew the results.
“It would be like using oligarchs in a study on average incomes in Moscow,” Repchenko said.
“Our analysts take into account the cost of ‘real deals’ in order to get a clear view of the situation.”
Repchenko said it was unclear which way the market would move in the short term.
While he did not expect any dramatic price swings during the remainder of the summer, any change in the macroeconomic picture in September or October would quickly be reflected in property prices, he said.
