The share of flats in finished condition in economy — and comfort-class segment increased by17%
An increasing number of Moscow-area developers start offering their clients new flats in finished condition. These offers are primarily intended to expand the range of products they sell and promote an increase in prospective demand. Indeed, as reported by RDI Company, for the last year the share of such new projects in economy -class and comfort-class segment grew by 17%.
Flats in finished condition occupy a definite niche on the residential property market of new Moscow and Moscow area. People tend to be less willing to invest in flat renovation, since they prefer to get settled into a new home as soon as possible, in response to erosion of purchasing power.\
The price is an important contributing factor to growing popularity of this type of residential property. The cost of flat renovation by developers will vary heavily depending on material and equipment used. However, the owner is probably looking at 20-30% less than a price of renovation by a team of construction workers employed by the owner.
Specifically, according to figures from RDI marketing experts, the average cost of finishing works in an economy -class flat in the Moscow will be somewhere near RUB 7000-8000 /sq. m. The cost difference between 1 sq. m of unfinished properties and turnkey ready flats will be RUB 4500 – 17500, respectively. Generally speaking, the prices for flats in finished condition varies from RUB 68000/ sq. m. to RUB 228 000 / sq. m.
The offers of turnkey ready flats are mostly concentrated in the economy -class segment (15–20% of total amount of new projects offered in the market), as well as in the comfort- class segment (7–10%). Such offers are noticeably rarer in the business-class segment (2–5%), since owners of business-class flats tend to make their homes more personalized.
Most developers offer their clients several types of fine finished interiors. That said, as reported by RDI experts, recent years saw a considerable improvement in the workup of proposed finishing solutions. Classic and modernist styles prevail; however, English, French, Scandinavian styles are also popular. Options differ in quality of materials used, and the standard work package is the same. Specifically, in “South Valley”, RDI offers customers 3 finishing options to choose from.
Dmitry Vlasov, commercial director of RDI Company, believes that the central objective of turnkey finishing is not yielding profit to developer, but rather engaging new customers. “For instance, in RDI projects, the turnkey finishing is not an instrument used to attract additional financial resources: the fine finish cost is included in the price of flat cost with no extra charges. Due to the large amount of purchased material and labor, the cost of flat renovation by developer will be less than expenses involved with separate teams of construction workers employed by the owner".
Currently, developers tend to provide for fine finishing in all flats of separate blocks or sections, so as to minimize discomfort involved with renovation works. "It should be noted that large-scale complex projects emerged more recently, that fall into the category of economy- and comfort property; in these projects all flats have turnkey ready finishing. This points to the fact that such products are marketable and demanded by some customers".