Moscow, Russian Federation
Text: Karino Hromin Sturm
As a Moscow resident for many years, I would divide my experience of living there in three parts: the USSR, the collapse of the USSR, and the third part of the Russian Federation under Putin. Moscow as a city in these three periods was completely different.
The Soviet Union was the largest country in the world with an area of 22.402.200 km2, and with 300 million inhabitants. After the collapse of the USSR, the Russian Federation has 17,125,187 km2 with 142 million inhabitants.
USSR
At the time of the USSR Moscow was a city of gray, only in May when the nature was awakening it was beautiful. The main strategy of economic development was a heavy industry, and the production of consumer goods and the food industry were neglected. Social employment policy was conducted so that everyone worked, and society had a solid middle class that had a lot of money but the problem was that they had no place to spend it because the consumer goods were not enough, especially imported.
The collapse of USSR
The beginning of the 1990s was the collapse period and the creation of the new Russian Federation. In Moscow it will be remembered by massive demonstrations and empty shelves in stores. This is a period of even greater grayness of Moscow and the end of the rigid discipline of the repressive apparatus and the beginning of privatization, plunder of property, corruption, crime and the disappearance of a large part of Russian capital that swept through the secret channels to the West.
President Yeltsin had health problems, and the economic situation deteriorated in Russia, and on December 31, 1999, he announced to the world his resignation, and brought Putin as successor.
The third phase: Presidency of Vladimir Putin
By coming to the forefront of RF, Vladimir Putin needed ten years to uphold the power by placing at all important positions his colleagues from KGB who, at that time, succeeded in stabilizing the Russian Federation, as well as crime and great plunder. He returned the main export economic attributes, oil and gas to state ownership.
There has been a lot of investing in Moscow for the last 15 years and there is so much difference in the glory and beauty of the city today that has become the real world metropolis. All the roads are asphalted again, all facades are renovated and decorated, and the wide center of the city is illuminated and refurbished. Decorated buildings and trees in parks, especially in Christmas and New Years’ time, simply caught the attention of Moscow’s visitors.
Transport
Russia has a good system of maritime and river transport, and many rivers and lakes are connected by canals, so that from the south, from the Mediterranean sea via the Black Sea, ships can transport goods to Moscow, Sank, Peterburg, Murmansk or Arhangelsk. There is also a developed railroad traffic, and the famous Transsibirsk railway line extends from Moscow to the Far East, and today many tourists ride this route.
I have to mention that the roads in the USSR were in a very bad condition, and there were no highways. Today, the situation has improved dramatically so that you can drive from Alma Ate, Ashhabad, Bishkek or Tashkent all the way to Moscow, of course, it may take several days depending on where you travel. However, airplane transportation between the distant cities is the most efficient.
Construction and housing prices in Moscow
It builds and sells nearly 130,000 apartments annually in the Moscow District, with a total area of over 8,800,000 m2.
If we talk about prices of apartments in Moscow, it should be noted that Moscow is considered only the central part of the city, and the small connected towns – the satellites, which make up the Moscow Oblast have 200,000 to 500,000 inhabitants. Of course the price depends on the prestige of the quarters where the apartment is located.
The first place in the ranking list of quarters in Moscow occupies a strict center around the Kremlin, the so-called Golden Mile (Ostozenka), where the most prestigious properties are located, whose price per square meter is $ 20,000 to $ 55,000. What we go further from the Kremlin, the price of a square meter is lowering, but still is very high and only available to the richest people. Other quarters are shared by prestige, infrastructure development level, or accessibility to various communications.
In Moscow, several business zones were built with modern towers over 60 floors with a nice view. For example, in the skyscrapers of the Moscow International Business Center “Moskva-Siti” (MMDC), apart from the business space, there are about 500 apartments. In this neighborhood, the price ranges from $ 7,940 / m2 to $ 23,700 / m2. A large difference in price is determined by the height of the floor as well as the view of the Kremlin or the Moscow River.
However, there are city quarters, which are affordable for ordinary working people. In the neighborhood of the metro station “Aerodrom”, in the north-west of Moscow, the average price per m2 will be around 3,800 euros, while in Certanovo in the south of Moscow, the average price is about 2,500 euros per m2. The difference is about 1,300 euros per square meter, which is certainly felt on the wallet. However, if we compare that the apartment in the Aerodrom quarter is a few minutes walking distance from the metro, and Čertanovo does not have a subway, then the customer will very well consider which apartment to buy.
Elite quarters are commonly considered to be located within 20 kilometers from the center of Moscow, behind of which the satellite cities of the Moscow region are located. In Podmoskovlje, located about 60 km from the center of Moscow, in 2017 the average price of a one bedroom apartment in a new building is about EUR 51,000, a two-bedroom apartment worth around EUR 90,000, and a three-bedroom apartment around EUR 118,000. Certainly further away from Moscow prices are less.
Very important is the location of the apartment and the availability of transport – a subway, a train or a road connecting the rings of a motorway that circles around Moscow. Particular attention is paid to traffic density and traffic intensity, as well as parking possibilities, also the location where building is located, near the river, lakes, green areas… Great attention is paid to insolation – which apartments face south.
It should be noted that most often, apartments are sold in Roh-Bau system, meaning naked walls, uncovered with plaster, no tiles in the kitchen and bathroom, no floors, and the front door and radiators are temporary. So the buyer after buying the apartment needs to invest in the final work and finish it up according to his taste.
The smallest apartments are those who build the most, one bedroom 30-35 m2 or two bedroom 55 m2. Larger three to four bedroom apartments build rarely, so those who want a bigger apartment usually combine and buy two or even three apartments and connect them to one. The percentage of one-bedroom and two-bedroom apartments is over 80%, and three to four-bedrooms only 20%.
Given the large space occupied by Russia with 9 time zones, for example in Siberia and the Far East, the price per square meter is about 440 Eur.
Garages and parking
Russian regulations require only 20% of the parking spaces, while our builders must provide a garage or parking space for each apartment. Construction of a garage underground is rare due to winter conditions and soil freezing, so very few residential buildings have underground garages. Most of these are street parking lots, sometimes covered parking spaces.
Wages and financial ability to buy an apartment
The Moscow Statistical Bureau publishes various statistical data on Moscow, and for 2017 it states that the average salary in Moscow amounts to 67.899 rubles or 1.164 dollars, or 1.101 euros, therefore most Russians are not rich, but represent typical middle class. Citizens of Moscow usually buy apartments on credit for 20 years.
Real estate tax
The annual tax on the real estate exists in Russia. Rate is not fixed, but is determined by the price and location of the land, the status of the buyer, whether he is an employed person, a pensioner, a legal person, etc. The tax is paid on family houses, apartments and parking places, then unfinished buildings and business premises. The tax is not paid for the first three years from the date of purchase, and when purchasing the property, the buyer does not pay any taxes, as is the case in Croatia.