Moscow Real Estate Overvalued

Many expect the Moscow real estate market to shift in favor of the buyer, and prices on apartments to fall, due to the financial crisis. A number of real estate agencies report rising supply on the market since the beginning of the month. Experts say that is the result of a selloff of investment properties.
The situation is similar on the suburban Moscow market, Regina Gusova, general director of Forestkomstroi, told RBC TV. Investment buyers have to wait to sell, she said, because of the high supply on the primary market. Georgy Dzagurov of Penny Lane Realty says the market is not collapsing, just coming down from July and August levels. Everyone wants to cooperate with the buyer now,” he noted.

Although developers are not saying so publicly, numerous commentators on RBC TV have noted that it is possible to receive a 20-percent discount when buying an apartment. “It is our observation that the situation [a buyer’s market] has been observed for more than nine months, and that is not in any way tied to current events. Several segments of the market simply dried up,” said Zhiltorg marketing director Anton Fatalibekov.

Developers are using the crisis as an occasion to offer discounts on unsuccessful projects. Those are projects that have been on the market for over a year. Some projects have been on the market for seven years. Buyers are warned to be attentive not to receive a discount on an unreasonable price.