Real Estate Market of Moscow. Analysis and Development Prospects

In our research, we have focused on the degree of influence of different factors on prices of real estate objects in the Moscow secondary real estate market. In the first stage of work, we have successfully solved the data processing issues using the means of IT-technologies. In the second stage, we have constructed the model in accordance with the hedonic pricing approach. In the third stage, we have tested and confirmed all stated hypotheses: Apart from hypothesis testing, coefficient analysis of constructed models gave the following additional results: 1) Kitchen space is the most valued by the owners of bed-sitters followed by the owners of 4-rooms apartments. 2) The most important factor for the price of real estate object is the total square. 3) The distance to the center is the most valued by the owners of 4-room apartments. 4) There is an overall decrease in prices in 2009 year presumably caused by the Credit Crunch ’07 – ’08. Then there had been the recovery period till 2012 and stable growth after. The most expensive segment (4-room apartments) has least suffered from the consequences of the crisis. The 1-room flats were hit most heavily. The constructed equations can be further used by the government in renovation program to calculate the fair characteristics of exchangeable flats. We think this feature can additionally motivate people to participate in the program as they will get an opportunity to choose the new flat based on the parameters they prefer (Total square, Kitchen square, Location, Distance to the metro or the center etc.) Our data have poorly described the bed-sitters market. We think that some additional factors can influence this market. It will be interesting in the future to expand the analysis to primary real estate market and also to include Moscow region and to increase the number of factors influencing the price. The results of such research will give more precise valuation of the price structure on Moscow real estate market.