Many experts are confident that the capital’s ban on the construction of apartments with an area of up to 28 square meters will receive a nationwide continuation. And they are already calculating what the consequences may be for the new building market, its professional players and buyers
The intention of the Moscow authorities to ban the construction of apartments in Moscow with an area of less than 28 square meters (which in practice means the disappearance of studios and small one-bedroom apartments from the real estate menu) has stirred up the market, forcing experts to analyze both the consequences of such a decision and its impact on the current state of affairs. It is worth recalling that at the same time, the minimum size of premises with a large number of rooms is set in the capital: for two—room apartments — 44 square meters, three-room – 56, four—room – 70. But the market discusses this part much less, focusing on the key reference point “28”.
However, the Metrium company took the trouble to calculate* what percentage of apartments currently for sale does not meet the specified minimum. It turned out that it was quite small: for example, out of more than 20 thousand two-bedroom apartments presented in April 2024 on the market of new buildings in “old” and New Moscow, only 86 lots with an area of less than 44 square meters were on sale. The offers are in eight projects, of which four belong to the mass segment and one to the business class in “old” Moscow, and three are sold in New Moscow. In addition, six more such options were found in the apartment segment.
“Non-standard “two-bedroom apartments” with an area of less than 44 squares are sold on average for 12.95 million rubles (313.8 thousand rubles per square meter). In the mass segment, the average cost of a small two-room apartment reaches 15.88 million rubles, and the average price per square meter is 376.3 thousand rubles. In New Moscow, developers are asking for less than 44 square meters for a two—bedroom apartment, an average of 11.63 million rubles (275.2 thousand rubles per square meter),” the company shares calculations.
By the way, according to the federal portal “World of Apartments”*, the most expensive apartments up to 28 square meters are located in Moscow (where they cost an average of 8,336,663 rubles) and in Sochi (8,274,382 rubles). Then there are Kazan (5,994,260 rubles), St. Petersburg (5,583,962 rubles) and Sevastopol (5,276,122 rubles). The cheapest ones are in Nizhny Tagil (1,850,000 rubles), Orel (2,243,100 rubles), Magnitogorsk (2,277,142 rubles), Orenburg (2,362,344 rubles) and Kurgan (2,335,330 rubles). On average, in all 65 key cities of the country, a baby apartment in a new building costs 3,622,903 rubles; over the year (from May 2023), the average price per square meter increased by 11.3%, and the average lot price increased by 10.7%, although specifically in Moscow the growth was 5.3% and 6%, respectively.
As for the three- and four-room lots of the “forbidden” size, Metrium did not find such in today’s metropolitan market either among apartments or among apartments. In general, such strict regulation of the area of apartments in the company is called not the most competent step. “Non-standard, small-sized apartments can have an important social function. To buy an apartment with two living rooms at the price of a one—room apartment, with three — at the price of a two-room apartment and so on is a great success for buyers who want to get maximum functionality with a very limited budget. In light of the challenges of demography, an artificial restriction on the construction of such apartments is impractical, because for a young family, it is often not so much the area that is important as the opportunity to have as many separate rooms as possible, even on a small meter,” says Ruslan Syrtsov, managing director of Metrium.
Against the background of the decisions taken, prices for lots of less than 28 square meters in projects under construction may increase, as the product promises to become scarce, — this is the opinion of Nikita Popov, director of the customer Department of the Precisely Group of Companies*. He does not exclude that some of the projects that have not yet received a construction permit will be redesigned: the square footage of studios, as well as apartments, “eurodwells”, which sometimes have an area of even less than 40 square meters, will have to be increased. “It is worth noting that the requirement does not yet apply to facilities in the Moscow region, and also does not affect the apartment segment, where mini-studios can still be found. However, time will tell whether such facilities will become more attractive for investment,” the expert emphasizes.
He also recalls that, for example, in the Krasnodar Territory, where the company’s projects are being implemented, a similar decision has not yet been made in the capital, but it is expected that such restrictions will be introduced in the near future. “This is due to the fact that Russian President Vladimir Putin, in his decrees on national development goals, instructed to provide Russians with housing of at least 33 square meters per person by 2030. Studios with an area of 15-20 squares have appeared everywhere in recent years, not only in comfort class, but also in business class. Now, in connection with the aforementioned presidential decree, it will be possible to forget about such formats,” Nikita Popov is sure.
The experts of the CIAN division also agree that the discussion of the application of the “area norm” may begin in other regions.Analytics”: in particular, the initiative of the capital’s authorities has already been supported by the governor of the Leningrad Region, Alexander Drozdenko, instructing the construction block to work on this issue. “Now the area of studios in new buildings in the Leningrad region cannot be lower than 24 square meters. Starting from June 1, we will increase the required minimum square footage to 28 square meters for new projects,” Mr. Drozdenko wrote in his personal telegram channel,”Kommersant reports.
Photo: AGN “Moscow”
In “CYANOGEN.Analytics” decided to find out* what market share of new buildings now consists of apartments and studios up to 28 square meters in the largest cities of the Russian Federation (calculations were carried out for key markets — 35 cities with a population of 500 thousand people, as well as Sochi, Kaliningrad, Moscow and Leningrad regions). Here are just some of the data obtained by the experts.
In most of the analyzed locations, lots with an area of up to 28 squares make up no more than 10% of the total active supply on the market of new buildings, and in three cities (Novokuznetsk, Saratov and Stavropol) there are currently no such objects on sale at all. That is, even if the Moscow ban gets a nationwide continuation, it will not have a noticeable impact on the market of new buildings.
Such facilities occupy more than 10% of the market in St. Petersburg (25%), Leningrad Region (23%), Sochi (21%), Moscow (16%), Sevastopol (15%), Yekaterinburg (13%), Moscow Region (12%) and Novosibirsk (12%) — in locations where the studio format is common. Compact apartments and studios are a significant market segment here (especially in the St. Petersburg region and Sochi).
Experts separately note that in the market of new buildings in Moscow and St. Petersburg, the share of small-sized apartments and studios has increased in the supply structure in recent years. For example, now in St. Petersburg such lots make up 25% of the market, a year ago – 24%, in the spring of 2022 — 19%, in the spring of 2021 — 17%, in the spring of 2020 — 11%, in the spring of 2019 — 9%. The dynamics are similar in Moscow: in five years, the share has increased from 4% to 16%, while the value has hardly changed over the past year and a half (it has remained at the level of 16-18%).
In the Moscow region, growth was more restrained: in the spring of 2019, facilities with an area of up to 28 square meters accounted for about 8% of the market, now it is 12%. In the Leningrad region, an increase in the share from 10% to 23% has been recorded for the last two years, before that the value changed from 11% to 32% (the share rose sharply, then sharply decreased).
“In other locations, where the share of lots of the corresponding area is now at least 10%, the situation is different. Novosibirsk has the most similar dynamics to the capital — in five years the share has increased, but slightly, and for the last two years it has been at the level of 10-12%. In Yekaterinburg, the share of compact lots increased in the second half of 2020 – the first half of 2021, after which it decreased to the level of 10-15% and is now practically unchanged. In Sochi, the indicator was the least stable, in some months the share increased to 50%. In Sevastopol, sharp changes in the indicator were also recorded in some months (for example, an increase to 36% in February 2022). Thus, there is no single trend for the growth or decrease in the share of compact lots in the market of new buildings,” CIAN shares data.Analytics”.
They are confident that the disappearance of baby lots from the sales structure will slow down the growth of average prices per square meter. “Many market participants are concerned that after the ban on compact apartments and studios in the market of new buildings, supply prices will soar. In fact, this decision should not have a serious impact on the price level, since it is aimed at a small part of the market and is stretched over time. Now it is not forbidden to sell such premises, you can only bring new projects with such an apartment to the initial stages of approval. In Moscow, the available sales volumes, in accordance with the documents received, but not launched sales, will last for several more quarters before buyers notice an acute shortage of such lots,” experts say.
In addition, they remind you that, all other things being equal, it is the smallest lots in most locations that have a higher price per square meter. For example, in Moscow, a square in compact lots is 7% more expensive than the market average, in St. Petersburg – by 2%, in the Moscow region — by 27%, in the Leningrad Region — by 8%, in Yekaterinburg — by 13%, in Sochi — by 9%. A possible withdrawal from the market of such facilities may, on the contrary, slow down the growth of average prices per square meter.
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“The target audience of apartments and studios with an area of up to 28 square meters are most often investors who have decided to keep their savings “in concrete”, as well as buyers of their first apartment (who want to have their own living space, but do not yet have sufficient funds to buy more spacious housing). For investors, banning compact studios will not be something critical: for them, paying the cost of three to four square meters is usually an achievable task.
For those who buy such housing for themselves, this decision can be quite painful. Therefore, some of the failed buyers will enter the rental market,” sums up the expert of CIAN.Analysts” Elena Lapshina.
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