The most expensive item might become cheaper.

Due to changes in urban development policy in Moscow and the permission for construction projects in the city center, market participants expect an increase in the number of new projects. As a result, the price of luxury square meters in the Central Administrative District (CAD), which is currently estimated at an average of $24,000, may slightly decrease.

In 2012, a total of $1.2 billion worth of luxury real estate was purchased in Moscow, according to IntermarkSavills. The same amount was spent on purchasing expensive Moscow housing in 2011. The average cost of purchased luxury apartments increased by 8% compared to 2011, reaching $2.8 million. The total number of transactions decreased slightly, with 420 sales deals (compared to 450 deals in 2011).

At the same time, in 2012, the Moscow authorities announced a review of urban development policies, allowing for new projects to be constructed in the city center. According to Kalinka Realty, plans have been announced for the construction of 1.92 million square meters of real estate in the Tverskoy District, which will increase the density of development in the area by 26.5%.

According to Welhome, the total supply volume in the primary market of luxury urban real estate in Moscow at the end of last year amounted to 1,150 apartments in 42 residential complexes.

Apartments were offered in 12 residential complexes, totaling about 350 units (excluding apartments in the Moscow City International Business Center).

"In the near future, new projects are likely to emerge and old projects will be resumed in central areas of the city. Complexes with apartments are likely to be implemented in former industrial zones. The company 'Guta Development' plans to get approval from the State Land Cadastre for the developed project on the redevelopment of 'Krasny Oktyabr', exceeding the permitted volume by 40,000 square meters. However, in 2013, the structure of supply in the primary market of luxury residential real estate will not change dramatically. The leader of this year in terms of supply volume, the 'Khamovniki' district, is likely to maintain its position," says Elena Yurgenova, Regional Director of the Residential Real Estate Department at Knight Frank Russia & CIS.

According to Welhome, Khamovniki is the most saturated district in the CAD in terms of the number of luxury residential complexes, accounting for 30% of the entire market. The next district is Ostozhenka, representing 20% of the market. "Zamoskvorechye" district is in the third place, with 4 residential complexes offered for sale, accounting for 13% of the overall supply in Moscow. If it is assumed that developers will have the opportunity to build in the CAD, the share of luxury new buildings in the Tverskoy and Zamoskvorechye districts is expected to significantly increase," says Zhanna Lebedeva, Head of the Residential Real Estate Department at Welhome.

"The most attractive district for construction today remains Khamovniki, where construction activity is the most active. The Basmanny district can also become promising, as it is home to many industrial territories that can become excellent sites for the construction of residential objects. In addition, this district is attractive due to good transport accessibility. The cost of offers in these districts will increase, and a large number of infrastructure facilities (shopping centers, shops, sports and fitness centers, etc.) will appear to serve the growing number of residents," says Karen Melkonian, Managing Partner of EliteCenter company.

In addition, experts predict an increase in the proportion of apartments in the center of the capital. "Due to the introduction of new land use rules in Moscow, construction in the city center is carried out within existing buildings. In Moscow, such objects are represented by renovated buildings offering apartments. Therefore, the supply of this type of housing is growing.

For the emergence of new projects, the Golden Island area, where the "Krasny Oktyabr" factory is currently located, and the Presnya district near Moscow-City are very attractive

"Here it is planned to construct new residential complexes by withdrawing existing enterprises and reconstructing the buildings located here," said Vladimir Kushnaryov, director of the luxury real estate department at Est-a-Tet.

According to experts' estimates, in a stable economic situation, the prices of apartments in luxury residential complexes will increase slightly, around 5-7% per year. However, if the number of new projects increases, the price of offerings will decrease.

"It can be expected that the average price in the primary market of the Central Administrative District (CAD) will likely decrease. Everything will depend on the quality and scale of the projects being erected in the city center, i.e., the structure of the offerings. As we know, in the post-crisis period, several large premium-class projects (a subcategory of luxury housing that is an intermediate segment between traditional luxury housing and business-class) have entered the market, which were previously unprecedented in scale on the market. Given the volume of supply and relatively low price indicators for the traditional luxury market, their influence on the average price level was significant (excluding the overall price reduction due to the crisis). Today, there are several announced projects in the center of Moscow, some of which belong to the deluxe elite class format, while others belong to the premium and business classes. The most anticipated large-scale business-class project is Red Site in the Presnensky district (Sergeya Makeeva Street). The launch of such a project will definitely lead to a decrease in the average price in the CAD. But at the same time, a decrease in prices in new elite-class objects should not be expected under conditions of stable demand. Small deluxe residential complexes will still be expensive," believes Konstantin Kovalev, managing partner of Blackwood.

According to the analytical department of Knight Frank, the average price per square meter in the primary market of luxury residential real estate in Moscow is $24,100. The minimum price is half of that. For example, according to Welhome, the price per square meter in a new building at Tsvetnoy Boulevard, bldg. 13 starts from $9,010. In the Novel House project (3rd Kadashevsky Pereulok), the minimum price per square meter is $10,000. However,

in most cases, at such prices, it is possible to buy apartments in buildings at the initial construction stage or apartments with large areas.

"The minimum price per square meter today ranges from $10,000 to $13,000 (for example, in the Italian Quarter residential complex on Fadeeva Street). However, at such a price, predominantly apartments with an area of ​​150-170 square meters are offered, the cost of which, as a result, is from $2 million and higher. As for offers of smaller sizes, for example, in the Literator complex, you can buy an apartment with an area of ​​75-80 square meters for $1.1-1.3 million," says Elena Yurgenova.

According to IntermarkSavills, the Wine House quarter in Zamoskvorechye on Sadovnicheskaya Street is the only project on the primary market where there are still offerings of apartments priced below $1 million.

The new projects that are expected to appear on the market in the near future are Grand Deluxe in Plyushchikha, Komsomolsky De Luxe (Komsomolsky Prospekt), residential complex at Ostozhenka, bldg. 12, "Plotnikoff" (Plotnikov Lane, 1), "Bolshoe City" (Beregovoy Proezd), Golden Mile private residence (Ostozhenka).