Moscow rental market in 2017 year: trends, prices and special aspects of lease by expatriates

In general rental rates in Moscow in the second part of 2017 year have reduction tendency. 

Exceptions are central and other prestigious locations of the capital which at all times are of great demand on the rental market. Foreign companies, embassies and diplomatic mission employees as usual chose this very areas for their residence:  Arbat-Kropotkinskaya and Tverskaya-Kremlin area.  

According to the data published on internet portal in the start of December, 2017 average rental rate for elite fall in price by 5-10%. But, traditionally, rental rates reduction is not applicable to the abovementioned areas as they are the main residential areoles popular among the expatriates, consequently, prices here are steadily high.

 Web-source on real estate market made a research on the most highly-demanded areas of considering property with the followings characteristics: apartment with two-three bedrooms with total area 130-170 sqm in pre-revolutionary Stalin period building with western renovation, 1-2 bathrooms, non-fixed parking or parking lot in the fenced courtyard.   

In 2017 according to price for the above mentioned standard type of residential premises the leading areas are Arbat, Kropotkinskaya, Patriarchy Ponds and Tverskaya, where rental rates ranges in average from 3000 to 3500 Euro per month, in Zamoskvorechiye area: from 2600 to 3200 Euro per month.

Depending on the class status of a housing, furniture quality and inner finishing, apartments in A-list euro buildings with underground garages costs 15-25% more than unfurnished apartments in pre-revolutionary and Stalin period buildings without underground garage.   

Owners of apartments in Moscow centre highly appreciate their real estate and are nor in hurry to reduce prices.  Three years ago, when there was sharp increase of Euro and US dollars exchange rate, rental rates un rubles raised in ruble equivalent, but the market  gradually corrected the prices in accordance to the new realities.  

First the landlords dropped rental rates in ruble equivalent (last year the dynamics in the top-10 areas  made up only 3,8% reduction), but on the second part of 2017 landlords have enough offers from potential  tenants and rather often are not ready to make concessions. They prefer to spend more time for suitable tenant search, but not to reduce the rental rates. 

Top-3 of the most expensive apartments in Moscow centre in December, 2017 
The highest rental price made up in December, 2017  1.765 thousand rubles per month for the apartment with total area 275 sqm in the building 11 in Bolshoy Levshinsky lane. 

Apartment is located in historical centre of Moscow in elite premium class residential complex «Dvoryanskoye Gnezdo». The territory of the compound is guarded and equipped with surveillance. There is an underground parking on the territory.      

photos of apartment in residential complex «Dvoryanskoye Gnezdo» in Bolshoy Levshinsky lane, bld. 11

Second place took the apartment with price 700 thousand rubles per month in Arbat area, at the address 1st Smolensky lane, bld. 17. The premises with total area 205 sqm are located in the premium class building named “Novopeskovsky” residential complex. 

Apartment has exclusive renovation in western style and equipped with inflow exhaust ventilation with air filtration. The courtyard is fenced and guarded 24/7. The price includes parking lot in the underground garage.       

photo of apartment in  residential compound «Novopeskovsky» in 1st Smolensky lane, bld. 17

The third place took the apartment in Bogoslovsky lane 12 Ain Patriarchy Prudy area. Modern style furnished apartment has total area of 126 sqm. It is located in residential compound «Sytinsky» and offered for rent for 650 thousand rubles per month. 

Building is equipped with contemporary engineering systems. The price includes one parking stall in the underground garage.    

photo of apartment in residential complex «Sytinsky» in Bogoslovsky lane, bld. 12A

At this according to release published by “Kommersant” publishing house Moscow is becoming more and more chip city for expatriates:  last year Moscow took 50th place in the rating of the most expensive cities and now the capital of Russia takes the 67th position. Thus, modern studio with designer’s renovation or 2-room apartment in Moscow centre costs just 110,000 rubles (1,580 Euro) per month.

Special aspects of lease in Moscow centre by expatriates in 2017
In respect of special aspects of rent in Moscow centre by expatriate we should mention , that around 30% of tenants in Moscow search for unfurnished or partly furnished apartments at this the proportion of unfurnished apartments is rather small and ranges from 10 to 15% of the total rental market supply.  

Before crises most of the unfurnished and luxurious apartments were located in Patriarchy Ponds area and areas next to international schools (Krylatskoye, Sokol, etc). But anyway there is no stable supply of unfurnished apartment in some certain Moscow area: it is a rarity, appearing on the market upon coincidence of circumstances convenient for a certain landlord (for instance in case the landlord lives abroad and have no possibility to buy new furniture from abroad). 

In order to satisfy all the demands of the customer, Landmark Real Estate agency do all the best to provide landlords with storage for landlords’ belongings and furniture located in the apartment. Depending on the lease agreement terms the payment for storage is charged from the landlord or tenant.  

Having got a request from the embassy or foreign company Landmark Real Estate always strives for negotiating of all the demand of the tenant on the lease agreement terms. 

As for the tenancy terms, traditionally, tenants prefer long terms contract with duration from one to four years and fixed rental rate paid in the currency in which they receive their salaries. 

Tough requirements to fix rental rates for long term rental period as usual is a crucial factor for the landlord while taking decision of collaboration with a tenant. The reason is the concerns of the owner are connected with possible drastical changes in the economy of Russian Federation, including risks of high inflation at the simultaneous impossibility to terminate lease agreement unilaterally. 

At the same time one more difficulty to sign a long term lease agreement is the obligation to register lease agreement at the Federal service of state registration “Rosreestr”. According to p. 2 cl. 609 of Russian Federtion Cilil Code, lease agreement for real estate signed for a year and more, is a subject to state registration. Registration implies collecting of a wide range of documents, spending much time for paperwork, and it is not always favorable for the landlords.

One more term which is not very profitable for the landlords is signing of lease contract without security deposit. The issue is that apartments in Moscow centre usually have qualitative renovation and equipment and sometimes rental payments cant cover expenditures to repair the damages occurred to expensive home appliance, plumbing fixture or interior decoration. 

Therefore, to achieve the most comfortable conditions for Italian embassy employees and adjusting of the deal to the embassy lease agreement terms we work out thoroughly with the landlords the most important three conditions: 
1.    Making a deal for 4-year term with a fixed rental price for the whole tenancy duration. 
2.    Lease contract providing no security deposit (traditionally, on Moscow market such deposit is equal to one month rental price).
3.    Search for unfurnished apartments corresponding Italian embassy criteria and negotiating the issue of furniture move out from the suitable apartments.  
Upon coordination of the lease contract we sign apartment transfer and acceptance act providing tenant with a photo-inventory of residential premises.  Should any issue to handle arise with the lease, from tenant’s or landlord’s part, tenant can rely on our team during the whole rental term. 


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