Tenants are puzzled: real estate in Moscow becomes cheaper, but rental rates are the same

Currently we can observe rather high market activity in renting Moscow housing. There are quite a lot of potential tenants interested in central Moscow area, especially in the area of Tverskaya, Patriarchy Ponds, Mayalovskaya metro, Arbat-Kropotkinskaya and Zamoskvorechye neighborhoods. 

Cental Best-sellers always carry value

Housing in these areas is traditionally best-selling due to great demand among foreign embassies employees and the heightened interest of global companies, which representative offices are located in the above-mentioned areas. 

However, it is well known about such a high demand of homes among expatriates, the housing stock of Moscow centre is quite scarce as this area is not very residential — it is flooded with office centers, museums and walking areas with cafes and restaurants. 

Good prices for the best tenants

As result, property owners exposing their apartment rentals on the market meet stable demand amidst potential tenants and have enough proposals not to negotiate asking prices.

Generally, discount can be provided in case there are some contract terms which are very advantageous for the landlord and it concerns the objects which are not of the greatest demand, located not in the most prestigious Moscow areas. Important ground for a discount are flexible contract terms for both landlord and tenant. 

The Landlords are willing to rent out apartment for a long term, but give prerogative to 1-2 year contracts due to the fluctuation the market situation. As well, the contract with duration more than one year should be registered in accordance with the Russian Federation law. Correspondingly, not all property owners are ready to deal with additional paper work.  

As usual landlords having Russian accounts prefer to receive rent in Rubles, the others having foreign accounts – in US dollars or Euro. The ones who have bank account in Euro have to deal with more difficult document arrangements.

Expats are keen on 2-bedrooms inside the Garden Ring

Traditionally, the apartments with following living standards are of the greatest demand: 
1)    Brick buildings in Moscow central area;
2)    2-3 bedroom apartments;
3)    Approximate budget 120 000 – 250 000 rubles per month depending on the building facilities, i.e. fenced territory, guard, parking, concierge. 

Two-three bedrooms with standard western renovation in secured buildings with parking are the most popular among expatriate employees. 

At all times the most prestigious area called ‘Golden Mile’ used to be Arbat-Kropotkinskaya owing to luxury of the home located in this area, therefore rental rates here used to be the highest in Moscow. 

But now we can see the different picture. Rental rates for similar options are at the same level in Arbat-Kropotkinskaya, Patriarshy Ponds and Zamoskvorechye areas, but supply of qualitative housing is more abundant in Arbat-Kropotkinskaya as housing stock in this area is bigger and approximately proportional to the demand, unlike other prestigious central areas. 
 

  Average index of Rental Rates for apartments in Moscow in 2018

   All prices are indicated in US dollars       

A-Class Buildings*

B-Class Buildings**

* Building with premium facilities located in the most prestigious surroundings: underground parking, 24 hours professional guard, fenced territory, reception, own infrastructure (SPA, supermarkets, cafes), premium fit out; restored buildings of great architectural and historical value; club mansions with small block of apartments (one or two per each floor).

** Buildings of high-quality construction: new monolith/brick, Stalin period buildings, ministerial buildings. Most are with fenced territories, concierge, secured parking in the yard.