2011 country real estate market · q4 2007 q4 2008 q4 2009 q4 2010 q4 2011 cottage on zhdanovskoe...
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2011 COUNTRY REAL ESTATE MARKET Saint Petersburg
EXECUTIVE SUMMARY• In2011mostdevelopersfocusedonsellinglandplotsincottagesettlements.Thetotalmarket
stockofcottagesettlementsconstructedbydevelopers,especiallyinthepremiumsegment,remainednearlyunchanged.Thesalesofsomenewprojectsoriginallyscheduledtostartin2011wereputoffto2012.
• Latein2011,asubstantialincreasewasseenindemandforcountrysidepropertiesintheupperpricesegment,whichresultedinajumpinthesalesnumberofsuchproperties.Nevertheless,annualsalesinthesegmentmorethanhalvedascomparedto2010.
• Thepriceindexdidnotshowanyapparenttrendsduringtheyear,howeverthereweresomeoccasionalslightdropsoftheindexresultingfromdiscountsandspecialoffersonsomeprojects.Ingeneral,bytheendof2011,averageaskingpricesgrewby11%ascomparedtoQ42010.
OVERVIEW
Knight Frank
2011COUNTRY REAL ESTATE MARKET Saint Petersburg
2
In2011,thesuburbanrealestateprimeresidentialmarketdevelopedmoderately.Mostdeveloperswaiteduntilsupplyofvacantpropertiesdecreasesfurtherandtheremainingpropertiesaresold,beforelaunchingnewsalescampaigns.SeverallandmarkprojectsareexpectedtoenterthemarketinH12012:thosewillbealmostcommissionedcottagesettlementsinpopularlocations.Besides,commissioningandtake-upamountsin2011werebelowthosereportedin2010.Thecountryhousepropertypurchaserprofileisgraduallychanging:averagecustomerbecomesyounger,showsincreasingtechnicalcompetenceandmakeshighdemandsofquality.
Key events
• Thekeyeventof2011thathadaneffectontheentireout-of-timeprimeresidential
marketwasthecompletionofseverallarge-scaletransportinfrastructureprojects.ThoseincludedthecommissioningofthetunnelundertheGulfofFinlandwhichhelpedtoachievethefullcompletionoftheRingroad;renovationofPriozerskoyeHighway,includingtheSkotnoye-Agalatovojunction,andcompletionofthe1stphaseoftheKievskoyeHighwayrenovationprojectwithjunctionsbuiltatmajorintersections.Theimprovedtransportconnectionsandaccessibilityofsomeareasledtohighdemandforpermanentcountryhousesandgeneralpopularityofcountrylifestyle.
• Inmanyprimecottagesettlementssaleswerestoppedonthefinalstageaftertheprojecthadbeencommissionedandownershadmovedin,andonly2-3housesremainedunsold–mostsuchdevelopmentsreportednosalesatallin2011.Atthesametime,thereissustainedinterestfrombuyersinseveralcottagesettlementsoftheupperpricesegment.Duringtheyear,thetotalmarketstockdroppeddownto97housesavailableforsaleontheopenmarket.
• In2011,twomorenewprojectsenteredthemarket;thesearelocatedintheprestigiousareawithinthe«GoldenTriangle»ofKurortnydistrict:VillaPremiumandGrandVill.Inaddition,fullyfurnishedhouseswereofferedforsalelocatedinTerijokiyachtclub,amodernpropertylocatedinZelenogorsk.
Supply
In2011,thelargestshareofout-of-townprimeresidentialmarketsupplywasconcentratedinKurortnydistrict,wheresixnewcottagesettlementswerebuilt.AsignificantshareofsupplyistraditionallyconcentratedinVsevolozhskydistrict.Vyborgskydistrictrepresentstheleastshare:theyareprimarilyconcentratednearLeninskoyeandRoschinovillages.
Ontheotherhand,suburbanresidentialdevelopmentsinKurortnydistrictareusuallymarketedasclub-likepropertiesandeachcomprisesnomorethan20countryhouseproperties,therefore,despitethenewsupplyofcottagesettlements,Kurortnydistrict
COUNTRY REAL ESTATE MARKET
Elizaveta Conway
HeadofResidential,
KnightFrankSt.Petersburg
«Both year-end market performance
indicators and expert opinions show that
the amount of quality supply has dropped
to a minimum. Last year there were many
examples of buyers facing a limited choice:
shopping for a suitable property often took
as long as several months. Buyers have
become more particular about their choice
of house: before buying a country house
property they consult technical experts,
designers and lawyers for a comprehensive
assessment of the property; at the same
time, customers pay attention to factors
such as convenience of transport access,
location image, social infrastructure.»
Main indicators Change*
Numberofprimecottagesettlements 14
Totalnumberofhousesinprimecottagesettlementswithsalesinprogress
369
Numberofcountryrealestatepropertiesavailableforpurchase
97
Numberofhousessold 19
Numberofprimecountryhousesettlementsscheduledtoenterthemarket
4
*Changeascomparedto2010
Source:KnightFrankResearch,2012
www.knightfrank.ru
3
COUNTRY REAL ESTATE MARKET
stillfacesthelackofout-of-townhousing,soin2011Vsevolozhskydistrictwasthenumberoneintermsofthenumberofcountryhouseproperties(53%).
Thetrendofmarketentriesperformedbyprojectsatthefinalconstructionstagecontinuedthroughouttheyear.However,someoftheseprojectshavenotbeenofferedforsaleontheopenmarket,asownersarewaitingforthemarkettogrow.
Atthesametime,suspendeddevelopmentprojectsstillremaininsomelocations,largelyasaconsequenceofahighconcentrationofprojectsunderconstructionorinprojectingthatappearedoverthelastseveralyears.
Nochangeswereseeninthesocialinfrastructureofsuburbanproperties:mostdevelopersdonotprovidesocialamenitieswithinthedevelopmentstheybuild,insteadofrelyingontheexternalinfrastructurewhichisnotalwaysconvenientlylocated.ThissegmentislargelyunderdevelopedintheLeningradregion,andisgraduallyemerginginlarge-scalehousingprojectsinalowerpricerange.
Demand
DespitethehighlevelsreportedinQ42011,thedeclineindemandobservedinthefirstthreequartershadanegativeeffectontheannualresult.Newcountryhousedevelopmentssold19houses,whichis50%
lessascomparedto2010.Thedeclineinnumberofofferedforsalehousestookplacemainlyduetogradualtake-upinseveralcottagesettlements.Newdevelopmentsmadenosignificantcontributiontotheoverallsupplyofhousingduetotheirsmallscale.
Qualitativechangesofthepurchaser ’sprofilewereregisteredinthecountryrealestatemarket,includingtheupper-pricesegment.Expertsagreethataveragebuyerhasbecomeyounger.Ontheotherhand,mostlyduetotheinvolvementofvarioustechnicalspecialists,propertyselectionprocesshasbecomeverymeticulous,resultinginincreasedsearchinganddecision-makingperiod.
Prime country house settlements, sales of which started in 2011
Project Address Numberofhouses Price,$mln
VillaPremium Kurortnydistrict,Solnechnoye 9 2.6–3.6
GrandVill Kurortnydistrict,Komarovo 11 0.9–1.2
Terijoki Kurortnydistrict,Zelenogorsk 9 1.8–2.3
Source:KnightFrankResearch,2012
Vyborgsky district
Kurortny district
Vsevolozhsky district
Source: Knight Frank Research, 2012
Distribution of supply by districts, 2011 %
21%
36%
43%
2011COUNTRY REAL ESTATE MARKET Saint Petersburg
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Commercial Terms
Duringtheyear,countryrealestatedevelopersofferedarangeofdiscountsandspecialofferstoencouragepotentialpurchasers,howeverasoftheyear-endaveragepriceintheUSdollartermsroseby11%ascomparedto2010.Pricegrowthwasmainlyseenfortheprojectsthatwereactivelymarketedduringtheyear.
Forecast
Initially,mostdeveloperswereskepticalabouttheprospectsforcountryprimeresidentialmarketin2011;asaresult,fewprojectsenteredthemarketduringthereportingperiod:manydevelopershadawait-and-seeattitudetowardsstartingnewdevelopmentprojects.
Theshiftindemandtowardscheaperhousingseensince2008year-endmademanydeveloperswithexperienceinprimeresidentialprojectsconsiderdiversifyingtheirportfoliosandincludemoreaffordableresidentialprojects.However,in2012developmentactivityintheprimesectorwillcontinue:newcountryresidentialprojectsareexpectedtobeannouncedtothemarket,andnewcountryrealestatepropertytypeswillbepresentedtothemarket.
Pricesareexpectedtorisemoderately,anddeveloperswillusemarketingtoolsmoreintensivelytopromotetheirprojects.
Source: Knight Frank Research, 2012
Distribution of sold properties in new cottage settlements by districts, 2011 %
60
50
40
30
20
10
0
Vyborgsky district
Vsevolozhsky district
Kurortny district
Source: Knight Frank Research, 2012
Average price of elite cottage has a positive trendthds. $
2,000
1,900
1,800
1,700
1,600
1,500
1,400
1,300
1,200
1,000
Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011
CottageonZhdanovskoelake,Vsevolozhskydistrict
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