Andrei Sado, Director,
Elite Residential Rental,
Penny Lane Realty
The world has changed. Many analysts did not expect the market to bounce back so quickly, after what seemed to be a devastating blow, not only to the Russian, but to the world economy. Financial and investment tycoons predicted a minimum of 5 years for the world economy to begin feeling the trends of a return to stability, some of them were right, we don’t yet know. American investment king Warren Buffet lost nearly US$ 7 billion on the assumption that the market will recover slowly.
In Russia, we have just about passed the bottom of the market. Some say that the residential rental market is about to turn. The ex-pats that we earlier assumed would not be returning are beginning to come back. Russia is still regarded as one of the best investment opportunities, although there are still very many uncertainties. Many companies see the current situation as a fast closing window of investment opportunity to introduce their services on Russian market. This window was created by an investment vacuum formed after the world financial crisis of 2008.
We see ex-pats arriving back in Moscow later this year and shifting the supply- demand misbalance back towards the former. Already some tenants have reported fewer quality offers, less desires for compromise, more choices of tenants for landlords leading us back to the situation of 2007-2008 where the market was completely dominated by landlords.
We expect a price-hike of 10-15% in May-June, and another rise of 10% in September-October. We strongly suggest to all of our clients to rent properties now, because waiting until May will cost you 10% more a month; an extra month of rent to pay a year.
Arriving ex-pats will create additional competition for quality supply, forcing you to make a decision quicker, pay more and agree to less. Prices on the rental market stabilized for a short time, however there is a secondary flow of people entering the market: Russian professionals who getting better jobs again. This, combined with the fact that many residential development projects (which usually add an additional 10% of new apartments to the market) were temporarily frozen and therefore unfinished on time, means that there is a real danger of there being a serious quality offers.
I only have one advice, Rent NOW!