Moscow will have the steepest price growth next year among the world’s most expensive cities for luxury homes because of a shortage of properties for sale, Knight Frank LLP said.
Prices for prime houses and apartments in the Russian capital will probably rise by about 10 percent next year after a gain of less than 5 percent this year, the London-based real estate broker said in a report predicting home values for 25 cities. St. Petersburg ranked third, with values likely to gain by 5 percent to 10 percent, the report showed.
“There’s a stock shortage in Moscow following the change of mayor last year, which has caused a freeze in new development,” said Patrick Dring, head of the firm’s international residential arm, at a presentation today.
Moscow’s Mayor Sergei Sobyanin is reviewing contracts signed by predecessor Yury Luzhkov, who is under investigation for alleged corruption and favoritism toward his wife, billionaire real estate developer Yelena Baturina. The couple deny any wrongdoing. The halt in development increased competition for luxury homes in the Russian capital.
Russia’s economy grew 4.8 percent in the third quarter from a year earlier, the Federal Statistics Office said last week, as demand for natural resources boosted production of oil, gas, metals and minerals.
Knight Frank predicts that steps taken by the authorities in China and Hong Kong, such as restricting mortgages and clamping down on speculative investment, will cool their housing markets. Prices in Shanghai and Hong Kong will fall by as much as 10 percent next year after “low interest rates super-charged growth,” said the firm’s head of residential research, Liam Bailey.
Knight Frank predicts values will gain less than 5 percent in London’s prime residential market, Paris’s will rise by as much as 10 percent and New York’s will be little changed next year.