Prime Residential Real Estate Market Report - Saint Petersburg 2019-9% reduction in supply over the year - Knight Frank
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-9% 342,000 rub./sq m
reduction in supply average price on the elite
over the year real estate market
Prime
knightfrank.com/research
Residential
Real Estate
Market Report
Saint Petersburg
2019
Key indicators
2019
Indicator Dynamics*
Flats supply, thousand sq m² 144.2 9% ▼
Demand for flats, thousand sq m 53.0 4% ▼ Nikolai Pashkov
General Manager
The total living space area of prime residential
19.9 71% ▼ Knight Frank St Petersburg
complexes where sales started in 2019, thousand sq m
The total living space area of commissioned
3.7 95% ▼
prime residential complexes, thousand sq m 2019 featured little activity of market
players and a record low number of
Average price, thousand rub. per sq m 342 0%
development projects launched and
commissioned. On the demand side, we
Source: Knight Frank St Petersburg Research, 2020 * Compared to 2018
did not observe any significant drop in
sales rates. The market is additionally
fuelled by demand from buyers from
Supply
other cities whose interest in elite real
estate in St. Petersburg has been strong
In 2019, the supply of prime residential In 2019, two new residential
for several years. Buyers from other
real estate was 144.2 thousand sq m complexes, both in Petrogradsky
regions mainly give their preference to
(1.2 thousand flats), which is a 9% District, were offered for sale. These
Krestovsky Island, a traditionally elite
decrease from the previous year. This is are a view building of the Neva Haus
location.
the lowest amount of supply in the last residential complex (LSR) and a club
A positive trend is that the number
five years. The reduction was driven by house Krestovsky IV (RBI). Thus,
of requests for spacious flats (of
a low rate of new projects entering the only 138 flats were added to the
200 sq m and more) with a large
market along with strong sales. supply.
number of bedrooms is growing. This
kind of product is sought after by
families with children and customers
Dynamics of prime supply and new housing supply
thousand sq m who intend to move from a country
house to a flat in the city.
Supply New housing supply
Interest in flats with a complete
200 200 finish is growing fast. Buyers of
premium properties value their time
150 150
and increasingly seek to avoid lengthy
100 100 finishing periods. Unfortunately, the
50 50 development of this niche is limited due
to the market itself, as St. Petersburg
0 0
has no projects that would combine
2015 2016 2017 2018 2019
both a high-quality finish and a nice
Source: Knight Frank St Petersburg Research, 2020
location. Thus, buyers have to choose
between finished flats in the secondary
market and newly built units without a
finish in flagship locations.
In 2019, the best-selling projects
were those residential facilities that
had been already commissioned.
The opportunity to see the finished
product and choose a unit you like is
still an unmatched advantage they
offer and also a buying motive when
it comes to high-end residential real
estate. In 2019, projects with a long
showing period and low sales showed
a significant (up to 20%) decrease in
prices.
Art View House
Average area of flats on sale
sq m
150
145 145.3
140 -13 %
decrease over
10 years
135
130
127.0
125
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: Knight Frank St Petersburg Research, 2020
In addition, 2019 marked weak toward the lower level of high-end 2 bedrooms accounting for the largest
activity among developers in terms residential real estate. shares of the total supply (35% and
of commissioning prime residential The structure of supply by flat type 29%, respectively) as at the end of
projects. Only one elite property, the has not changed, with flats with 3 and Q4 2019.
Art View House with a total area of
3.7 thousand sq m, was commissioned in
2019. The majority of prime residential Supply of prime flats by location
thousand sq m
complexes (71%) available on the market
have been commissioned and account 2019 2018
for 44% of the total supply of residential
Petrovsky Island
spaces on sale.
2019 saw the continued trend of the Petrogradskaya Side
concentration of new elite residential Krestovsky Island
projects on Petrovsky Island along with Liteiny
+14 p. p.
a reduced share of the total supply Admiralteisky increase of supply on
Petrovsky Island
accounted for by other locations. Kamenny Island
Elite spaces on Petrovsky Island and Zolotoy treugolnik
Petrogradskaya Side in the aggregate Tavrichesky Garden
account for 71% of the total supply. In
terms of layout and arrangement design 0% 20% 40% 60% 80% 100%
and quality characteristics, residential Source: Knight Frank St Petersburg Research, 2020
complexes in these locations gravitate
Privilege
For each flat type available for sale,
the average area values are gradually Dynamics of transactions and the cost of prime housing
decreasing. The percentage of spacious
Numbers of transactions Average cost of prime housing
flats is going down due to the depletion
units million rub.
of the available supply and a higher share
600 60
of smaller flats offered in new projects.
400 40
Over the last decade, the average flat area
on the supply side has decreased from 200 20
145.3 sq m to 127 sq m. 0 0
2015 2016 2017 2018 2019
Demand Source: Knight Frank St Petersburg Research, 2020
Sales of elite residential properties have
changed only slightly compared to
the past year, showing a 4% decrease. The structure of transactions at the cost of prime housing
53,000 sq m of spaces (more than 400
2019 2018
flats) were sold during the year. In 2019,
the most sought after properties were over 90 million rub.
flats with 2 and 3 bedrooms, and the 50–89 million rub.
sales of the latter have decreased by 35–49 million rub.
10 p. p. over the year. 20–34 million rub.
High sales rates were registered below 20 million rub.
among those prime residential projects
that are at their early construction stages 0% 10% 20% 30% 40%
and offer flats at prices below the average Source: Knight Frank St Petersburg Research, 2020
market levels. This is also seen in the
buying motives: the share of purchases
for investment purposes has grown by
5 p. p. compared to the previous year. Main reasons for flat purchase
In general, the range of purchase prices
2019 2018
of flats has not changed and the buying
budget varied within the range from 20 Relocation to improve living conditions
million to 34 million rubles. Worth noting Relocation to a more suitable district
is an increase in the percentage of deals Investment
with flats cheaper than 20 million rubles Purchase for children/parents
(by 5% compared to 2018). Representational purposes
In 2019, the average cost of prime
housing sold went down to 38.9 million 0% 10% 20% 30% 40% 50%
rubles, which is a 5% decrease compared Source: Knight Frank St Petersburg Research, 2020
to that in 2018.
One Trinity Place
Commercial terms
As at the end of 2019, the average supply successful projects have raised prices on
price of prime residential properties in average by 1-6% compared to 2018.
St. Petersburg was 342.1 thousand rub. The most expensive flats are still
per sq m. In the period from January to found in residential facilities located on
December 2019, it fluctuated within the Kamenny Island (the Rezidentsiya na Oksana Kravtsova
range from 1% to 2% and by the end of Kamennom) and in the Golden Triangle CEO
the year almost reached the level of 2018 area (Osobnyak Kusheleva-Bezborodko). Evrostroy
(342.4 thousand rub. per sq m). However, over the year, the average
On a property-to-property basis, price of flat on sale in these locations For us, the year was extremely
the average price changed in different has decreased by 12–18% due to the successful. We have reached
directions. In Q4 2019, prices for some adjustment of average prices. necessary agreements with banks,
prime residential projects with a long The most affordable residential earned their support, met the sales
showing period and low sales followed a properties with the average price of targets for elite real estate and
downward trend. These are, first of all, about 31 million rub. are available in successfully closed several deals to
projects located on Kamenny Island. On the Admiralteisky and Petrovsky Island buy new sites in different districts of
the other hand, developers of the most locations. St Petersburg.
Some of the trends on the elite
segment include a decline in supply of
Dynamics of the average price for prime housing at the primary high-quality properties which continues
market for the fourth year in row. For example,
thousand rub. per sq m
Krestovsky Island, which has been
400 historically an elite location in the
350 city, has almost no lands left for new
residential construction projects. The
300
last one was a plot on Esperova Street
250
where the Esper Club facility of 68 flats
200 2016–2019 will be completed in 2020.
average price
150
fluctuations Apparently, in the future, developers
100
3% will continue to use sub-classes to
identify premium categories of real
50 estate properties and artificially expand
0 the borders of elite projects, moving
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 beyond the limits of historically high-
Source: Knight Frank St Petersburg Research, 2020 end locations.
The average cost and supply price of flats on sale in the locations of elite housing
Average cost Average price
million rub. thousand rub. per sq m
250 1,000
933
200 800
150 600
618
513
100 400
418
327 364
50 281 282 200
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Source: Knight Frank St Petersburg Research, 2020Vera Seryozhina
Director of Strategic Marketing
RBI Group
The whole of 2019 was marked by the at once — instead, prices grew gradually residents. The main awards were won
industry’s transition to the use of the throughout the year. by the Futurist in the Urban Awards
escrow account mechanism. Naturally, Third, not so many new projects were competition (the grand prix), by the Dom
game-changing global developments launched in 2019. But market still has Na Naberezhnoy project in the Urban
like this have their effects on the market. enough supply, and most certainly there Awards and in the Customer’s Trust
What are they? is no shortage of supply. For example, Awards, by the Biografiya residential
First, it is uneven distribution of Petrovsky Island alone has a huge backlog facility in the Customer’s Trust Awards,
demand. The first half of the year, until featuring very diverse projects. by the Studio Moskovsky and Futurist
the 1st of July, was very active, while What’s new with RBI? This year, we projects in the rating of the Delovoy
the second one saw somewhat lower have commissioned two new projects in Peterburg newspaper, and by the
demand. But in general, the industry the centre of St. Petersburg. These are the Futurist in the Golden Trezzini Awards
has made it through the early transition ArtStudio in 2-ya Sovetskaya St and Dom U for Architecture.
to the escrow scheme without any Nevskogo in Poltavskaya St. And the launch of sales of our new
collapse, and sales have not dropped In 2019, our projects received a lot of project, Krestovsky IV, made a great
compared to the previous year. awards, which make us proud, as they ending to the year, as it is really a
Second, the transition to the use show that we are appreciated not only by great project. It is our first project on
of escrow accounts has led to higher independent experts, but also by our peer Krestovsky Island and it is truly a top-
prices. Of course, it did not happen competitors and by our customers, the city class elite property.
Forecast
In 2020, the prospects of the prime
residential segment may depend on
the emergence of new projects in the
traditional locations. In the current
situation when the supply is down,
prices are stable and the selection of
high-quality modern prime residential
properties is small, it will be reasonable
and relevant to offer well-thought-out,
interesting projects to the market.
In 2020, we can expect sales of several
elite buildings with a total area of about
27 thousand sq m to be launched.
Krestovsky IV
Svetlana Moskovchenko Nikolai Pashkov
Head of Research Department General Manager Knight Frank St Petersburg
svetlana.moskovchenko@ru.knightfrank.com nikolai.pashkov@ru.knightfrank.com
+7 812 363 2222 Knight Frank LLP 2020 – This overview is published for general information only. Although high
standards have been used in the preparation of the information, analysis, view and projections presented
in this report, no legal responsibility can be accepted by Knight Frank Research or Knight Frank for
any loss or damage resultant from the contents of this document. As a general report, this material
does not necessarily represent the view of Knight Frank in relation to particular properties or projects.
Reproduction of this report in whole or in part is allowed with proper reference to Knight Frank.You can also read
