the Volume of investment in Russian real estate market declined in January—June of the current year by 24% yoy to 88 billion rubles, according to the international consulting company Knight Frank.
Moreover, analysts do not exclude, “the activity of foreign investors may be for the year minimum for the last 10 years,” compared to the same period last year the volume of investments decreased in the first half of 7 times to 3.7 billion rubles.
Commenting on the findings, managing partner of Knight Frank Russia Alexey Novikov stated that “in the first half of 2020 market real estate investment in Russia has been experiencing a number of negative factors: the withdrawal of Russia from oil deals with the OPEC, pandemic coronavirus, the effect entered in the country restrictions — all this affected the negative dynamics in investment”.
“the Continuing uncertainty does not allow institutional players to make decisions and to purchase items. Measures taken by the government in the aspect of the tenancy and stimulate the real estate sector, does not help much neither tenants nor owners. A greater effect was the reduction of the key rate to 4.5%, which is the minimum level for the entire period of inflation targeting regime”, — the expert specifies.
In his words, “the decline in total volume of investments was generally expected, however, it is worth noting a sharp decline in invested assets to foreign players.” “Compared to the same period last year the volume of investments decreased in seven times to 3.7 billion rubles. Besides the obvious reasons of the pandemic and the volatility of the ruble, the effect was the statement of the President about introduction of 15% tax on income of foreign individuals and companies. A similar trend with a high probability will continue until at least the end of next year,” predicts Novikov.
Napothink also that the Russian economy in February—March 2020 was under the powerful impact of two negative factors — the rapid spread of the pandemic coronavirus infection COVID-19 and its deleterious effect on the global economy and collapse in oil prices. Against this background, the rouble significantly depreciated against the dollar and the Euro. Reacting to the situation, the government and the Bank of Russia adopted several packages of measures to support the economy and citizens.
may 11, Russian President Vladimir Putin announced the end of may 12, a single period of days off, entered March 30, in the fight against COVID-19.
on 2 June Prime Minister Mikhail Mishustin reported on the nationwide state plan for the recovery of the Russian economy in 2020-2021 years, noting in particular that the cost of the plan will amount to about 5 trillion roubles. June 19, Putin was sent a revised draft of the national plan.
July 2, Deputy Minister of Finance of the Russian Federation Vladimir Kolychev said that the total cost of the measures (the bailout package), aimed at combating the spread of coronavirus infection in Russia and mitigating economic impacts from restrictions imposed, estimated to be worth about 4 trillion rubles. According to him, the main focus of the budget measures were made on several fronts: strengthening health systems, supporting citizens and businesses, the balancing of regional budgets.
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