Moscow Apartment Demand Plummets
- New Europe Investor
- July 07, 2015
Russian newspaper Vedomosti has reported that the demand for apartments in the country’s capital Moscow, has fallen by 40% in the second quarter of 2015 compared to the same period last year.
During the second quarter of 2015, 27,056 second hand apartments were sold in the city. This compares to 44,841 in the second quarter of last year.
Unsurprisingly, as Moscow apartment demand plummets, prices in the city have also contracted. The newspaper stated that 74% of the 8,873 apartments sold in June, were sold following a drop in their asking price.
The reason for the sharp contraction has been a fall in real wages in Russia due to spiralling inflation. Additionally, the country is expected to contract by up to 5% this year.
Interest rates have also been a large factor. They had to be hiked last year following the rapid fall in value of the ruble precipitated by western sanctions and a fall in the price of oil. They have since been brought back to 12.5% following a high of 17% at the beginning of the 2015.