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St. Petersburg Experiencing Housing Glut

Published: July 9, 2014 (Issue # 1819)



  • Glavstroi-SPB has just started selling units in North Valley, their newest residential complex.
    Photo: Glavstroi-SPB

The amount of new housing available in the St. Petersburg real estate market for the first six months of 2014 is up 67 percent more than a year ago. The main introduction of new housing into the market came in the first quarter while the demand had stopped by the arrival of summer.

In the first half of the year, 1.4 million square meters of housing was commissioned, according to the citys Committee for Construction. In the first half of 2013, 948,000 square meters were built.

In the first quarter, according to the committee, 934,000 square meters were put on the market, an increase of 60 percent. From February to April, interest in buying a home was attributed to currency fluctuations and people actively invested in housing still under construction, said Alexei Gusev, commercial director for the construction company Glavstroi-SPB.

According to Gusev, in April Glavstroi-SPB started renting out their fifth completed residential complex North Valley, which has a total area of 98,000 square meters.

By the end of the year there will be a total of over 470,000 square meters in North Valley. In the first half of the year, the average price per square meter was 70,000 rubles ($2,047), which is 5 percent higher than the year before, Gusev said.

Despite the high demand at the beginning of the year, prices for the first half of the year increased by only 2.9 percent when compared to last year in January and by June there was an increase of only 0.5 percent, said Irina Onishchenko, director of LenSpetsSMUs sales department. A large number of new projects entering the market have kept the prices high and an increase in prices of 7 to 9 percent is expected by the end of the year, she predicted.

According to Inna Malinovskaya, a spokesperson for the Group of Companies Center of Shared Construction, or CDS, the average price for the mass-market segment starts from 65,000 to 75,000 rubles ($1,900 to $2,200) for 1 square meter, depending on the location, the quality of the housing and whether or not its under construction. According to Malinovskaya, demand remains high.

Despite more housing being constructed, it is selling at about the same rate as last year approximately 2 million square meters in the first half of the year, said Onishchenko,.

By the end of the year, approximately 4 million square meters of housing will be made available for sale, according to Gusev. Denis Babakov, Commercial Director for LSR Real Estate North-West, is more optimistic, predicting 5 million square meters, but only under favorable market conditions and if all planned buildings are put up for sale.





 


ALL ABOUT TOWN

Thursday, Oct. 2


The celebration of the bicentennial of the birth of Mikhail Lermontov continues with todays free exhibition in the citys Lermontov Library at 19 Liteiny Prospekt. Titled Under the Rustling Wings, the temporary exhibition will feature the costumes and scenery used in the 1917 production of Lermontovs play The Masquerade, which he wrote in 1835 when he was only 21 years old.



Friday, Oct. 3


Learn more about how to manage and evaluate employee performance during SPIBAs Human Resources Committee meeting this morning on Employee Assessment: Global and Local Trends. Starting at 9:30 a.m., the discussion will touch on such topics as the partnership between HR and business, reliable assessment strategies and more, with Tatiana Andrianova, the head of the SHL Russia and CIS branch in St. Petersburg, as the featured guest. Confirm your participation by Oct. 2 by emailing office@spiba.ru or calling 325 9091.


AmChams Procurement Committee Meeting is at 9 a.m. this morning in their office in the New St. Isaac Office Center on Ulitsa Yakubovicha.



Saturday, Oct. 4


Wine and cheese lovers will get their chance to revel during Scandinavia Country Club and Spas Wine Market Weekend. Going on today and tomorrow, wining diners can listen to live music, take part in culinary classes and, of course, sample a variety of fine wines from around the world. The cost of admission is 400 rubles ($10.30) for adults and 200 rubles ($5.15) for children.



Sunday, Oct. 5


Look for the latest fall fashions at the Autumn Market today in Freedom Anticafe at 7 Kazanskaya Ulitsa. The minimarket plans to offer clothes more flattering than the puffy jackets that are a staple of the citys cold-weather fashion, while offering the same amount of protection from the biting winds blowing off of the Baltic.



Monday, Oct. 6


SKA St. Petersburg, the citys KHL affiliate, welcomes Slovakian club HC Slovan in a match-up tonight at the Ice Palace near the Prospekt Bolshevikov metro station. The puck drops at 7:30 p.m. and tickets can be purchased on the clubs website or in person at either the arenas box office or the clubs merchandise store on Nevsky Prospekt.



Tuesday, Oct. 7


Learn more about Russias energy industry at the St. Petersburg Energy Forum that begins today and runs through Oct. 10. Attracting industry experts and political and business representatives, the forum plans to welcome more than 350 plus companies and their representatives to discuss the future of Russias largest economic sector.



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