Unemployed, this 61-year-old former mechanical engineer has lived in the Czech Republic for two years, with his wife and children, while keeping a foothold in Russia.
“We hadn’t planned to sell it,” he told AFP. The apartment in question, a 64 m2 in the south of Moscow, had been recently renovated.
But the outbreak of the Russian offensive in Ukraine a year ago turned everything upside down.
Problem: no one came to knock on the door, the price being too high on a market cut off by thousands of Muscovites with strong purchasing power, who had gone to live abroad.
“We therefore decided to lower the price, by a little more than 20%”, he comments, for a total amount of “200,000 euros”.
“Never seen”
The real estate market in Moscow has been “complex” for a year, euphemized by AFP Vadim Orekhov, 35, co-founder of the Moscow real estate agency Rio Luxe.
“There are a lot of goods” on the market, “so it creates strong competition between sellers,” he explains. “It’s unheard of for two years,” he says, pointing out that the Covid-19 pandemic had already strongly affected the local real estate market.
The price per square meter is now around “3,200 euros”, down from the peak caused by the wave of “panic” last March-April when the Russians rushed to invest in stone in full collapse of the ruble, which has since recovered, specifies Anastasia Tchitchikina, who has been working on the market since the beginning of 2022.
The director of the “Real Estate Market Indicator” analysis center, Oleg Reptchenko, draws a parallel between the current market and “the situation in 2014-2015, when the first sanctions were imposed” once morest Moscow, following the annexation of the Ukrainian Crimean peninsula.
In both cases, “following a rise in prices in the short term, the cost of housing has gradually fallen,” he summarizes.
A new phenomenon in 2022, however, is the number of proxy transactions that have exploded.
According to the INCOM-Immobilier agency, the share of apartments sold in Moscow via an agent “was at least 17% this fall”, once morest “less than 5%” before the Russian assault on Ukraine.
“Perestroika” version 2022
Developments in the real estate market illustrate Russia’s adaptation to “new realities”, as Russian leaders call them, eager to show that the country has “overcome” the first waves of international sanctions, without being totally isolated .
A local brand has thus replaced the American fast food giant McDonald’s, and the main brands of foreign sodas have given way to local equivalents.
International trade with China broke a record last year, reaching 190 billion dollars, according to Chinese customs.
And the growth forecast for the Russian economy for 2023 was even largely reassessed by the IMF at the end of January, going from an anticipation of -2.3% to a slight increase of 0.3% over the year.
An announcement that has not gone unnoticed in the Kremlin, which reminds anyone who wants to listen that “the collective West” has launched a “hybrid war” – including economic – once morest Russia, intended according to him to weaken it.
Not insignificant signs of resilience which cannot, however, hide persistent difficulties, following a year of military campaign in Ukraine.
The curtains of the big brands in the shopping centers of central Moscow remain down; inflation, around 12%, has undermined the purchasing power of Russians; tourists have practically disappeared; and supply problems in certain industries are still there, such as in the automotive sector where the lack of semiconductors leads to tensions on the assembly lines.
The EU also approved a tenth set of sanctions on Friday. The hoped-for goal: to limit even more the incomes of Moscow in the prospect of a long conflict.
