What Explains the Observed Rise in Real Estate Prices in Krasnodar and the Krasnodar Krai

The pace of growth in real estate prices in Krasnodar and the Krasnodar Krai has noticeably declined since the third ten-day period of last year. Apartment prices in Krasnodar had been rising every month until the start of the global economic crisis, and these increases were often deliberately created by construction and real estate companies. The price of new developments began to fall in September 2008 (which had not happened on the Krasnodar new-build market for the previous three years), and some companies that had been building mainly with borrowed funds, after selling off their last remaining properties, left the market altogether.

After that, the downward price trend among many developers in Kuban continued. The luxury housing segment located in the city's most expensive districts and the "old stock" in the form of Khrushchyovka apartments fell the most, while new apartments in panel buildings lost the least, although they had been the most in demand initially. As for real estate prices in Krasnodar and the Krasnodar Krai, a slight increase was observed this summer.

Rising material costs and a certain shortage of apartments in panel buildings — since some projects that started a couple of years ago were completed by builders before July — became the main reason for the increase. To date, analysts have not given a completely certain answer regarding apartment prices in Krasnodar this autumn and winter; there are several reasons. First, a new wave of crisis is expected in autumn, and, as is customary in autumn, large corporations repay borrowed loans. Thus, there is no definitive view on the Krasnodar Krai real estate market for the second half of 2009.

Why is demand for Krasnodar real estate so high? Krasnodar is a southern city with a large number of tourists (of all groups, northerners love Krasnodar the most: some of them come for vacation, some buy property and eventually relocate to the city), and it should be remembered that Krasnodar has topped Forbes magazine's "Best Cities in Russia for Doing Business" ranking for two years running. In addition, the city has a large number of offices of various Russian and foreign companies. All these aspects point to a significant number of promising opportunities and a high level of economic development in the region.

How to wisely choose an apartment in Krasnodar or the Krasnodar Krai? First, pay attention to the number of completed projects and the company's history — all this is easy to find out both at the office and on the website of the construction company that interests you (as a rule, more than 50% of newcomers find a suitable company using the World Wide Web and only then go to the office, and if a developer uses website creation services in Krasnodar and actively advertises in Krasnodar, they most likely have a good track record and properties in several parts of Krasnodar).

In addition, through the local Kuban Internet "community" it is possible to learn about reputable and unscrupulous developers; don't hesitate to look for reviews about companies on local sites, portals, forums and other sources of the Russian-language Internet.