The share of investors in premium real estate in Moscow is three times higher than in St. Petersburg.

Experts from Kalinka Group analyzed the demand among buyers of premium real estate in the two capital cities. It turned out that the number of investor-buyers in Moscow is about 30% of the demand structure. At the same time, the number of investors in St. Petersburg has decreased over the past year and does not exceed 8-10%.

The low share of investors among buyers of luxury real estate in St. Petersburg is due to the focus of St. Petersburg buyers on purchasing property for personal residence. In addition, the rate of price growth for elite square meters in the Northern capital is not as high as in Moscow, where investors expect significant growth in property value after its completion. Price increases in premium-class projects with increasing construction readiness sometimes exceed 30-40%, for example, in the designer house ELEVEN, which the holding company "RSTI" (Rosstroyinvest) is building in the Presnensky district. Investors also consider the possibility of profitable daily rental of luxury apartments, which is possible due to the high business traffic in the capital.

"In addition to price growth, premium and luxury real estate have a greater resilience in terms of demand and prices compared to the mass segment, which is more susceptible to the influence of external political and economic factors," said Alexander Shibaev, Director of Development at Kalinka Group.

The main investment demand for real estate in Russia is currently concentrated in the capital. In the luxury real estate market in Moscow, the average weighted offering price for the second quarter of 2021 exceeded 1 million rubles per square meter and reached 1,040,000 rubles per square meter, an increase of 29% compared to the previous year and 11% compared to the first quarter of 2021, mainly due to the release of new expensive deluxe-class properties. In terms of subclasses, the average weighted offering price in the elite & deluxe segment was 1,622,000 rubles per square meter (a 30% increase over the year) and 826,000 rubles per square meter in the premium segment (+25% over the year).

"We are noticing an increase in the influx of investors with unusual formats," commented Andrei Nepomnyashchy, Director of Sales at the "RSTI" holding company in Moscow. "For example, in addition to buyers who live in two cities and purchase apartments as an alternative to hotels, there are investors who buy multiple properties for their children or choose apartments with terraces as objects with unique characteristics for long-term rental to family tenants at higher rates.". 

In general, buyers of premium real estate in the two capitals are seeking to purchase fully finished apartments. There is a growing trend towards acquiring housing with complete interior design. Many customers in this market have already undergone numerous renovations and want to minimize the time and resources spent on finishing. The main request in this regard is for high-quality materials, a versatile design project, and an acceptable combination of price and quality. Importantly, future owners are not willing to tolerate the noise of repair work during the first years of living in the apartment.

The requests of buyers of premium real estate in St. Petersburg and Moscow differ in terms of conceptual solutions. For example, in St. Petersburg, many premium properties are located near water, and buyers expect the developer to arrange the waterfront area with a pier and berths for storing small vessels and yachts. In contrast, in Moscow, customers in the premium segment are very demanding in terms of the presence of conceptual playgrounds for children, a park area, as well as a high-quality club infrastructure in the building, reminiscent of the infrastructure of a premium hotel.

Residents of both capitals equally pay attention to the layout solutions in their requests: the presence of bathrooms and walk-in closets in each bedroom in the apartment, and the presence of a guest bathroom even in one-bedroom apartments. It is worth noting that Moscow buyers have a much wider selection of such options. In contrast, in St. Petersburg, customers are less demanding when it comes to engineering solutions. For example, they are fine with the absence of central air conditioning in premium segment homes if there are niches in the walls or balcony space provided for air conditioners.