New construction apartments in Omsk have experienced a decrease in cost.
Recent trends in the Russian real estate market have seen a notable increase in the prices of new apartments in Omsk, with these properties costing an average of 33.5% more than renovated secondary market apartments. This trend is observable across many Russian cities, but Omsk stands out as one of the cities with the largest price gaps [1].
Several key factors contribute to this trend. The supply structure and sufficiency of new construction in each region play a significant role in price differences between new and secondary housing. The solvency of primary home buyers reflects the demand and affordability for new apartments [1].
Location and urban development features also impact the desirability and pricing dynamics of new apartments. In addition, the share of new housing in the secondary market can influence overall price levels [1].
These factors create a situation where new apartments in Omsk are, somewhat illogically, more expensive than ready-to-move-in alternatives. However, it is expected that this gap will narrow as mortgage rates decline and market conditions adjust [1].
The cost of living in Omsk is moderately priced, with estimated monthly expenses for a family of four ranging from ₽114,594 to ₽120,460, and for single persons from ₽47,411 to ₽48,895 [2]. The rental market in Omsk has also shown considerable tightening since the pandemic, with rental rates for one-room apartments having increased 2.2 times since 2020, reflecting strong demand pressure that could also influence housing purchase prices [4].
The premium segment of residential real estate in Russia is growing, with rising prices in major cities like St. Petersburg, but regional markets like Omsk exhibit distinct price dynamics driven by local supply, demand, and economic factors [3][4].
Key Takeaways for Omsk's Real Estate Market
- New apartments cost approximately 33.5% more than renovated ones.
- Price differences are driven by supply-demand imbalances, buyer solvency, and urban development.
- Strong rental market growth indicates housing demand stress.
- Cost of living is moderately priced, but data is limited.
This explains why new housing prices in Omsk are currently elevated relative to older apartments, influenced by regional market characteristics and national macro factors like mortgage policies and urbanization trends [1][2][4].
The dynamics of the Omsk real estate market confirm that buyers were waiting for a softening of monetary policy. In most cases, the increase in median prices in ads is due to a decrease in the volume of the most affordable offerings [1].
In July, eight out of 16 major cities saw prices rise, three remained stagnant, and five decreased. Chelyabinsk recorded a +2.2% increase in apartment prices in new buildings, while Moscow saw an increase (+4.2%) [1]. The median cost of a square meter in new residential real estate in Moscow is 451,000 rubles, making it one of the most expensive cities in the surveyed group [1].
On the other hand, the median cost of a square meter in new residential real estate in Omsk decreased by 0.8% in July, reaching 162,000 rubles [1]. The median cost of an apartment on the primary market in Omsk is 8.0 million rubles, with an area of 60.6 sq.m [1].
In the coming months, there may be a partial transfer of funds from deposits to the real estate market, as rates remain high, and the increase in prices is most noticeable in cities with a high share of deals without the use of preferential mortgages, such as Moscow, St. Petersburg, and Kazan [1].
Yevgeny Belokurov, commercial director of "Yandex.Real Estate", comments that the beginning of the cycle of interest rate cuts by the Central Bank could have influenced the interest in the real estate market [1].
References:
[1] https://www.kommersant.ru/doc/4758419 [2] https://www.forbes.ru/economics/2021/04/28/skolko-stoit-zhit-v-omske [3] https://www.rbc.ru/economics/21/07/2021/60f001ec9a79479e3f8c38b5 [4] https://www.vlast.ru/news/188106-v-omske-zavisimost-zhilishcha-v-arendu-uvelichilas-v-dva-raza-s-2020-goda
What could be some potential factors for investors considering investing in the housing market of Omsk, Russia? The costs of new apartments in Omsk are currently higher than renovated ones, primarily due to supply-demand imbalances, buyer solvency, and urban development. Additionally, the strong rental market growth indicates housing demand stress, which could potentially influence buying prices.
