Rental real estate market during the coronavirus pandemic

Confidence Group will be delighted to negotiate with the owners of apartments rent deduction during the pandemic or to help with the search of house or cottage according to your criteria.

Because of the crisis in Moscow caused by the dollar rise and the epidemic of coronavirus the residential rental market began to fall. Lately we observe mass cases lease agreement termination between tenants and landlords, as well as a wave of negotiations to reduce the rent during a pandemic.

Despite the fact that on the rental real estate market we observe of increasing the offers of apartments still there is no high demand for rent. Due to the coronavirus pandemic the flow of tourists decreased significantly and to avoid money loss many landlords who gave apartments for rent for short term have to follow the new rules and switch to the long-term rental market.

The reduction in demand in the Moscow real estate rental market at the beginning of the pandemic was about 10%, due to the declared self-isolation and a reduction of incomes, at the moment there is even more drop in demand, about 25-30%. After the announcement of self-isolation, there was a significant increase of lease agreement termination. This is also due to the fact that people are leaving Moscow. In the near future the offer in Moscow will exceed demand of apartments, thus we expect a large number of apartments will be empty. The market for business-class apartments will suffer the most. Competent and adequate owners will be ready to make concessions and consider options for reducing rents. The number of requests to reduce rents increased in several times. This is mainly due to the fact that many companies are closing down or send their employees to self-isolation without wages. There is also a wave of termination of lease agreements due to the fact that migrant workers are leaving the country.

The decrease in demand is also explained by the fact that restrictive measures have appeared in connection with the spread of coronavirus, clients are postponing relocation and new home search for the period of self-isolation, both voluntary and mandatory. In addition, landlords themselves, for the same reason often postpone or move to another dates apartment viewing. Another reason for the decline in demand, at the moment less obvious, is the beginning of massive staff dismissal. Many of those working in Moscow are immigrants from other regions who rent apartments. Quarantine is not the best time to find new job, so temporarily the number of immigrants arrival to Moscow will decrease. Long-term leases imply stability of plans and now many are in uncertainty. Citizens limit their trips around the city and contacts with people, which can also affect the viewings. Also, due to the upcoming summer season, we observe interest is being redirected in favor of renting a house in suburban.

Because of coronavirus pandemic it is obvious that the summer plans of many Russians are changing, since it is unlikely to be able to go to the sea outside of the Russian Federation this summer. At the moment in the real estate market the rental service of houses and cottages in suburbs is gaining weight. We see in this a great opportunity to spend time outside of the city in excellent conditions and in the fresh air. Spending time in a house with all the amenities near a pond and not worrying about viruses and diseases is a great opportunity.

Our team of professional consultants will be delighted to negotiate with the owners of apartments rent deduction during a pandemic or to help with the search for a magnificent house or cottage according to your criteria. 

For additional information, please contact consultants of Confidence Group.

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