The crisis in the housing market has led to an increase in popularity of housing in the Leningrad Region compared to apartments in St. Petersburg.
According to Dataflat.Ru, a database specializing in appraising apartments in new buildings and tracking price trends on the primary housing market, the results of apartment sales for the first nine months of 2022 in the St. Petersburg metropolitan area are mixed. While many developers in the city have experienced a decline, several in the region have managed to improve their positions despite the challenging market conditions. Notably, Euroinvest, led by Andrey Berezin, is among the main winners.
Preserving Price Growth
Setl Group remains the top-performing player in the St. Petersburg real estate market in terms of both revenue and number of units sold, but has experienced a decline in sales volume and revenue over the past year. LSR Group takes second place with a revenue increase of approximately 11% and an increase in the number of units sold. SPb Renovatsiya, a structural division of the Samolet group, achieved significant growth in both the volume of units sold and revenue.
However, most other developers in the top 10 have experienced a decrease in sales, with some seeing a noticeable drop. The financial performance of the largest developers in the city has remained stable due to the growth of the average price per square meter, which has increased by approximately 17% since the beginning of the year.
Despite this growth, experts and developers believe that the market has reached a plateau and that price growth potential has been exhausted. However, housing costs are not expected to decrease due to the rules of escrow accounts. Builders have adjusted their strategies to the crisis, preferring to build fewer units with a guaranteed prospect of selling at a given price rather than taking the risk of building more and potentially making a loss.
The Region is Going for a Record
The Leningrad region’s housing market is experiencing a surge in construction and sales, with developers benefiting from strong buyer interest in local apartments. The top three leaders in the region include two St. Petersburg-based companies, CDC group of companies and Euroinvest Development, a subsidiary of Euroinvest investment company.
Despite being considered a small to medium-sized player, Euroinvest Development, headed by Andrey Berezin, has managed to increase the number of lots sold from 1420 to 1487 and generate proceeds of 9.37 billion rubles, up by over two billion rubles from the previous year. This increase in financial efficiency has propelled Euroinvest Development to third place in the Leningrad region. Berezin emphasized the importance of maintaining stability and meeting obligations to clients during the current situation.
A few months ago, Andrey Berezin, the chairman of the board of Euroinvest, described the company’s stable situation in the housing market, with all their projects scheduled for completion and no financing issues. He attributed their success to their ability to consistently deliver high-quality housing before the deadline, which allowed them to keep prices and continue developing.
However, independent experts suggest that Euroinvest has untapped potential that could lead to even higher results. For instance, the upcoming launch of a new building in the iD Murino residential complex with 568 lots for sale could help the company achieve this potential. This building will implement the 3iD concept, which focuses on making apartments comfortable regardless of size, utilizing modern management interfaces, and creating public spaces within the residential complexes.
Moreover, Euroinvest has managed to retain a preferential mortgage rate of 0.1% per annum for new apartments, which may further increase the competitiveness of their offerings. Overall, the company’s success can be attributed to their commitment to delivering high-quality housing, which has resulted in faster sales despite higher prices than their competitors.