Rental prices in Krasnodar experience a significant drop, reaching a decrease of 11% over a prolonged period.
In the heart of Russia, the city of Krasnodar has seen a notable shift in its long-term rental market. According to recent data, the median rental cost for housing in Krasnodar stood at 27,000 rubles in June, marking a 11% decrease compared to six months ago. This trend is not unique to Krasnodar, as rental costs in other million-cities across Russia have also decreased by 6.3% over the same period.
Despite the decrease in rental costs, the demand for long-term apartment rentals in Krasnodar has seen a significant surge. The city now boasts a demand that is 13% higher than previously, and above the national average. This increase in demand is 9% higher than the national average increase in demand for long-term apartment rentals in other Russian cities.
The supply of housing in Krasnodar has seen a slight decrease, with a 3.4% reduction since the beginning of the year. However, the number of available apartments has increased by 1.9 times during the same period. Experts attribute this increase in supply and the decrease in rental costs to the influx of affordable new buildings and secondary housing in the mass segment.
The lower rental costs and rising demand in Krasnodar can be attributed to several factors. The overall cost of living and rent prices in Russia are significantly lower than in countries like Israel, with rent prices around 51% lower on average. Additionally, economic challenges and comparatively low salaries in Russia reduce residents' ability to pay high rent, putting downward pressure on rental rates.
High mortgage interest rates in Russia also contribute to the rental market trends. With mortgage interest rates around 14.7%, many residents may be deterred from buying property, keeping them in the rental market. The overall economic uncertainty and high borrowing costs can suppress real estate price growth and rental demand.
Local infrastructure and amenities issues may also play a role in Krasnodar's rental market. Reviews of cultural and recreational facilities in the Krasnodar region suggest suboptimal maintenance and limited accessibility, which could negatively impact the desirability of living in such areas and thus rental demand and prices.
Broader economic factors, such as inflation, economic sanctions, and geopolitical tensions, are likely contributing indirectly to the lower rental rates in Krasnodar. As residents adjust their spending and migration patterns, the rental market is affected.
In conclusion, the combination of lower income levels, high borrowing costs, and local amenities challenges alongside Russia's generally lower cost of living contribute to the observed decrease in rental rates in cities like Krasnodar around mid-2022. The demand for long-term apartment rentals, however, remains strong, with Krasnodar standing out as a city with a higher demand compared to the national average.
investing in Krasnodar's real-estate market, particularly in the long-term rental sector, could offer appealing opportunities as the demand for apartments is significantly higher than the national average. The housing-market analysis indicates a decrease in rental costs, which is a positive factor for potential investors, even though the supply of housing has seen a slight reduction.
Although mortgage interest rates in Russia remain high, making it challenging for residents to purchase property, this trend keeps the rental market active, with many opting to rent rather than buy, thus fuelling the demand for long-term apartment rentals. Consequently, it's worth considering investing in Krasnodar's rental properties, given the favorable conditions, such as lower rental costs and strong demand.
