KOMMERSANT | Putin’s invasion has demolished Moscow’s rental market. What effect has the exodus of foreigners had

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This is the latest report in our ‘Russian press’ series that brings Universul.net readers a glimpse of life inside Russia after it launched its unprovoked war against Ukraine.

Media laws

Kommersant does not call the invasion a war or an attack as draconian anti-media laws  ban telling the Russia public anything about the war that conflicts with the Kremlin’s chosen narrative about the “special military operation.”

<< As a result of the geopolitical crisis, the sharp reduction in the number of foreign tenants who have a  large budget for apartment rentals (upwards of 150,000 rubles per month, about 1,900 euros) and the departure of a number of Russian nationals have forced some owners to reconsider rental prices in Moscow. This has led to a 10-15% decrease in some rental. Thus, high-budget real estate is returning to pre-pandemic levels, >> consultants say, Kommersant reports.

<< In the first quarter of 2022, some 41% of high-end apartments in Moscow rented were rented for under 400,000 rubles ( 5,000 euros) … according to a study by Knight Frank.

The most notable was the drop in the rental of property over 600,000 rubles (7,500 euros), by 3 percentage points for the quarter, now accounting for 29% of high-rental properties, according to Knight Frank.

Low competition

Prices for big-budget rents have returned to pre-pandemic levels in the fall of 2019, says Alexei Ciumalov, the acting managing director of the Kalinka Group. Property which was overpriced fell on average by 10-15%. The chairman of the AREA Marketing Committee, Alexander Shibaev, talks about a price decrease of  6-10%, in March-April, for apartments. compared to January-February. Mr Ciumalov calls this ‘a  stabilization process.’ Last year, some properties were being rented for higher than the market price, due to low competition.

According to Knight Frank estimates, supply increased by 20% for the first quarter of the year. For the first time in two years, consultants noted the positive dynamics of the indicator. This is largely due to the 30% quarterly decrease in the number of transactions for the rental of luxury apartments and apartments. Demand has been hampered by the departure of potential tenants.  Andrei Soloviov, director of the urban real estate department at Knight Frank, says that in 2014, foreign clients accounted for  60-70% of the t high-budget real estate rents, which then dropped sharply to 30%. In 2016-2019, the figure  increased, but in 2020 there was a new decline, dictated by the pandemic. „As the restrictions were lifted, we saw a slight increase, but only 1–2% of foreigners are renting high budget places,” says Mr Soloviov.

Elena Kulikova, director of the rentals Savills, , also observed the hemorrhage of foreign clients in 2020-2021, the share of expats for this segment was about 40%, which has now  fallen to 20%.


She says Russians will be the main customers, although some decided in March to temporarily leave the country.

For the remaining customers, the range of options has expanded. Alexei Ciumalov says that now potential tenants are looking at five or six proposals compared to three at the beginning of the year. This has led to an increase in transactions, he says.

Elena Kulikova says high-end rents will continue to adjust their rents. „The gap between what the owners want and what tenants are willing to pay is growing seriously. Gradually, landlords will have to lower their rates otherwise the already oversaturated market will have fewer transactions,” she says. She doesn’t exclude  prices dropping by 10-15%. >>

Inside Russia. Universul.net brings you coverage from the Russian media


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