h1 2011 prime country houses market...the new average price levels are sufficient for maintaining...
TRANSCRIPT
OVERVIEW
H1 2011PRIME COUNTRY HOUSES MARKETMoscow
Knight Frank
EXECUTIVE SUMMARY• Demandforcountryrealestateincreasedinthefirsthalfoftheyear:theindexofclientinterestreachedamaximumin
June2011,exceedingitslevelinApril2011,andhasrisenbyafurther15.6%inJuly.
• Premiumproperties,whichweretakenoffthemarketearlier,havebeenputbackupforsale,takingadvantageofthedemandsurge,anddevelopersarealsoannouncingnewprojectsintheluxurysegment.Wethereforeexpectanincreaseofclass-Asupplyinthenearfuture.
• Pricesforcountrypropertyhaveremainedsteadywithminorfluctuations,causedbywashing-outofsupplyandseasonalactionsanddiscounts.Weexpectthemodestsummercorrectiontobefollowedbyamodestincreaseofprices.
H1 2011 PRIME COUNTRY HOUSES MARKETMoscow
2
Atotalof28newcottagesettlementscameontothemarketinMoscowRegionduringH12011,whichis1.8timesmorethaninthesecondhalfof2010.In70%ofthesettlementsplotsweresoldwithoutcommitmentofthesellertobuildahouseontheplot,whilesalesintheremaining30%ofsettlementswereofcottages,plotswithseller ’scommitmenttobuild,oroftownhouses.
Thelargestshareofnewsupplyisstillrepresentedbyeconomyclasssettlements(classС):salesopenedat10suchsitesinQ22011,andtherewere9openingsforsaleinthefirstquarter.OverallsupplyintheeconomyclassnearlydoubledinH12011comparedwithH22010andthebiggestshareofnewsettlementsareonNovorizhskoyehighway(32%ofthetotal),followedbyKaluzhskoyehighway(16%),andKashirskoyeandKievskoye(11%each).Theother30%ofneweconomy-classsettlementsareonLeningradskoye,Minskoye,Dmitrovskoye,Novoryazanskoye,OstashkovskoyeandYaroslavskoyehighways.
Thenumberofbusiness-class(classB)settlementsalsoincreased:salesbeganin9class-BprojectsduringH12011,comparedwith8inH12010and5inH22010.Thelargestnumberofnewclass-BcottagesettlementsisonNovorizhskoyeandKaluzhskoyehighways(3oneach).Salesopenedinonebusiness-classcottagesettlementontheRublyovo-Uspenskoyehighwayinthefirsthalfof2011.
Therewerenosalesopeningsinnewpremium(class-A)cottagesettlementsinH12011,butsomedevelopersarere-offeringproperties,whichtheyearlierwithdrewfromthemarket(forexample,Nakhabino-CountrylocatedonNovorizhskoyehighway,15kmfromtheMKAD).
Developershavealsoannouncedanumberofnewpremium-classprojects,whichwillincreasetheshareofluxurypropertyinoverallnewout-of-townsupply.Inparticular,CapitalGroupwillinvest$100,000,000indevelopmentoftwocottagesettlements
PRIME COUNTRY HOUSES MARKET
Main indicators (absolute terms)
Q22011
Averagepriceperproperty,includingland($persqm)
Primarymarket 4,050
Secondarymarket
5,280
Newsupply,numberofsettlements 28
Source:KnightFrankResearch,2011
Main indicators
Q-o-q* Y-o-y**
Averagepriceperprop-erty,includingland($persqm)
-1.9%
+3.75%
Newsupply = -15%
Buyersactivity
by2times
byathird
*(Q22011/Q12011)**(Q22011/Q22010)Source:KnightFrankResearch,2011
Andrey Solovyev HeadoftheCountryHousesDepartment
«We are now seeing a mild summer stagnation, which is usual in the holiday period from mid-July to mid-August. Fluctuations on international markets and political risks are not major issues at present. The luxury country property market is as stable as it has ever been and is steadily but confidently improving and I expect confirmation of the trend in the next quarter by the KEYS Country index of prices on the premium primary market. Announcement in July of plans to substantially increase the territory of Moscow at the expense of surrounding Moscow Region was unexpected, although the idea had been openly discussed for some time previously by the federal government and Moscow and the Region administrations. The plan undoubtedly creates new prospects and opportunities for developers. Knight Frank is currently reinforcing its country house team, opening a new country real estate office on Novorizhskoye highway, and is in talks with a leading market players on sale of properties in cottage settlements.»
*Number of settlements, which opened for sale in the
period
Source: Knight Frank Research, 2011
There were 28 sales openings at cottage settlements in H1 2011. New supply was nearly double the level in H2 2010 and equal to the level in H1 2010
0
5
10
15
20
25
30
35
40
H1 2009 H2 2009 H1 2010 H2 2010 H1 2011
А В С
H1 2009 H2 2009 H1 2010 H2 2010 H1 20110
5
10
15
20
25
30
35
40*
А В С
www.knightfrank.ru
3
onan80-hectareplotinKrasnogorskyDistrictofMoscowRegion.TheRublyovo-Arkhangelskoyesettlement,developedbySberbankatasitebetweenRublevo-UspenskoyeandNovorizhskoyehighways,willconsistoflow-riseluxurydwellingsandpromisestobeanewflagshipdevelopment.AnumberoflargeprojectswerealsoreportedalongRublyovo-Uspenskoyehighway.Levelsofpremium-classcountrysupplywillbesignificantlyincreasedwhentheseprojectscomeontothemarket.
Demandforcountrypropertyisincreasing,helpedbyaseasonaleffect.TheindexofclientinterestinJune2011was31.77%higherthaninJune2010.RiseoftheindexinQ2comparedwithQ12011was56%andsix-monthgrowthwas104%.
Thebiggestshareofluxurydemandisnowconcentratedinthemostliquidpartofthesegment,consistingofcountrypropertiesforbudgetsupto$3,000,000.Buyersarelookingfordwellingswithaveragespaceonplotsofmodestsize(upto2,000sqm),andaremoreattentivethanpreviouslytoissuesofutilities,infrastructure,presenceofaprofessionalmanagementcompany,ownershipcertificate,andreputationofthedeveloper.Wearealsoseeinggreateractivitybydevelopers.TransactionswithcountrypropertyremainconcentratedaroundRublyovo-UspenskoyeandNovorizhskoyehighways(theNovorizhskoyemarketisparticularlypromising).
Y-o-ygrowthofaveragepricesforcountrypropertywas3.75%inQ22011,followingamodestcorrectionof1.19%inthefirstquarter.
TheaveragepriceperpropertyinH12011was11%higherthaninQ22009,whenthemarkethitbottom,butremained25%shortoftherecordlevelsachievedinQ22008.
Priceindicatorsontheprimaryluxurymarkethavebeenstablewithslightupsanddowns.GrowthofaveragepricesinH12011comparedwiththeendof2010was1.25%toalevelof$4,050persqm.Changesinaveragepriceshavebeenduetoreductioninvolumesofrelativelycheapsupply,andtodeveloperdiscountsandpromotionalactions.
Therewassomereductionofpricesonthesecondarymarketforluxurycountrypropertyassellersattemptedtodrawbuyers’interestinthehighseason(springtosummer)throughattractiveterms.Averagemarketpricesdroppedby0.4%inthesecondquarterandnowstandat$5,280persqm.Discountsof15-20%arebeingofferedinsomecases,butthenewaveragepricelevelsaresufficientformaintainingnewsupplyvolumesatrelativelyhighprices,andforensuringtake-upofsupplyatthelow-endofthemarket.
The index of client interest has been rising with modest seasonal fluctuations, and achieved successive maximum levels in April and again in June 2011, when it reached 564 points
*Index of client requests for country property (the level
in January 2009 is taken as 100 points)
Source: Knight Frank Research, 2011
0
100
200
300
400
500
600
Jan 2011 Feb 2011 Mar 2011 Apr 2011 May 2011 Jun 2011
0
100
200
300
400
500
2011
600*
Jan Feb Mar Apr May Jun
Country property prices in Moscow Region are rising subject to modest seasonal fluctuations
*Index of supply prices on the primary and secondary
markets for country property in Moscow Region (the level
in Q1 2008 is taken as 100 points)
Source: Knight Frank Research, 2011
77
78
79
80
81
82
83
84
Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 201177
78
79
80
81
82
83
84*
Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011
А-107
Dm
itrovskoye Hw
.
Novorizhskoye Hw.
Ryblyovo-Uspenskoye Hw.
Leningradskoye Hw.
Pyatnitskoye Hw.
Minskoye Hw.
Kaluzhsk
oye Hw.Kievskoye Hw.
Simferopolskoye H
w.
Yarosla
vskoe H
w.
airport Domodedovo
airport Vnukovo
Vars
havs
koye
Hw
.
А-107
Volokolamskoye Hw.
Kashirskoe Hw
.
Novoryazanskoe Hw.
Mozhaiskoye Hw.
Gorkovskoe Hw.
Shyolkovskoe Hw.
Nosovikhinskoe Hw.
Ryazanskoe Hw.
Airport Sheremetievosecondary market
primary market
$2,800
$3,500
$5,280
$4,050
$3,650
$3,750
$3,510
$3,800
$6,100
$5,200
$3,070
$3,700
$6,760
$6,250
*Average price per property, $ per sq m Source:KnightFrankResearch,2011
OVERVIEW
EuropeAustriaBelgiumCzechRepublicFranceGermanyIrelandItalyMonacoPolandPortugalRomaniaRussiaSpainSwitzerlandTheNetherlandsUKUkraine
AfricaBotswanaKenyaMalawiNigeriaTanzaniaUgandaZimbabweZambiaSouthAfrica
Middle EastBahrainUAE
Asia PacificAustraliaCambodiaChinaIndiaIndonesiaMalaysiaNewZealandSingaporeSouthKoreaThailandVietnam
Americas & CanadaBermudaCaribbeanCanadaUSA
Office Real EstateStanislav [email protected]
Warehouse Real Estate, RegionsViacheslav Kholopov [email protected]
Retail Real EstateSergey Gipsh RegionalRetailDirector,[email protected]
Professional Consulting ServicesKonstantin [email protected]
Elite Residential Real EstateElena [email protected]
Financial Markets and InvestingEvgeniy [email protected]
Valuation ServicesOlga Kochetova [email protected]
Saint PetersburgNikolai Pashkov
KyivMikhail [email protected]
Marketing, PR, and Market ResearchMaria [email protected]
EstablishedinLondonmorethanacenturyago,KnightFrankistherenownedleaderoftheinternationalrealestatemarket.TogetherwithNewmarkCompany,KnightFrank’sstrategicpartner,thecompanyencompasses243officesin43countriesacrosssixcontinents.
KnightFrankhasbeenasymbolofprofessionalismfortensofthousandsofclientsallovertheworldfor116years.After16years,KnightFrankhasbecometheleadingcompanyinthecommercial,warehouse,retailandresidentialrealestatesegmentsoftheRussianrealestatemarket.Morethan500largeRussianandinternationalcompaniesinRussiahavealreadymadeuseofthecompany’sservices.
ThisandotherKnightFrankoverviewscanbefoundonthecompanywebsitewww.knightfrank.ru.
© Knight Frank 2011
Thisoverviewispublishedforgeneralinformationonly.Althoughhighstandardshavebeenusedinthepreparationoftheinformation,analysis,viewsandprojectionspresentedinthisreport,nolegalresponsibilitycanbeacceptedbyKnightFrankResearchorKnightFrankforanylossordamageresultantfromthecontentsofthisdocument.Asageneralreport,thismaterialdoesnotnecessarilyrepresenttheviewofKnightFrankinrelationtoparticularpropertiesorprojects.
ReproductionofthisreportinwholeorinpartisallowedwithproperreferencetoKnightFrank.
MOSCOW
Russia,119021,11Bld2TimuraFrunzeStr.Phone:+7(495)9810000Fax:+7(495)9810011
ST. PETERSBURG
Russia,191025,3BMayakovskogoStr.Phone:+7(812)3632222Fax:+7(812)3632223
KYIV
Ukraine,04071,39-41HoryvaStr.Phone:+380(44)5456122Fax:+380(44)5456122