BRICS Forum and tourists to warm up rental market in Kazan
Kazan is the second after Moscow the price of long-term apartment rentals
The long-term apartment rental market continues to grow in Kazan. High mortgage rates on the secondary market, the tourist season and the upcoming BRICS Games are putting pressure on prices. The supply of apartments on the market has decreased by 33.6% over the year, according to Avito Real Estate (Avito Nedvizhimost). At the same time, demand has increased by 9% in the last month alone. What factors are influencing the rental market today — in the review of the analytical service of Realnoe Vremya.
There are becoming fewer apartments to rent
Prices on the long-term rental market in Kazan have increased by 36.4% over the year. “The average rental rate of apartments for all types of rooms in Kazan was 22 thousand rubles in the first half of last April. By the first half of this April, it increased by 36.4%," Konstantin Kamenev, the head of the long-term rental category at Avito Real Estate, told Realnoe Vremya.
Three-bedroom apartments (+57.1%) and studios (+43.8%) have risen the most in the rental market of Kazan.
Average price of renting apartments of different number of rooms in Kazan
NUMBER OF ROOMS | AVERAGE RENTAL PRICE IN APRIL 2023 | AVERAGE RENTAL PRICE IN APRIL 2024 | YEARLY DYNAMICS |
Studios | 16 000 | 23 000 | +43.8% |
1-room | 19 000 | 25 000 | +31.6% |
2-room | 26 000 | 35 000 | +34.6% |
3-room | 35 000 | 55 000 | +57.1% |
4+-room | 84 000 | 100 000 | +19% |
Avito Real Estate data
According to the results of the first half of this April, 3.4 thousand apartments were presented on the long-term rental market in Kazan. Compared to the same period last year, according to Avito Real Estate, the volume of apartment supply decreased by 33.6%. The demand for apartment rentals in Kazan has hardly changed over the year. However, in a month, compared to the first half of March, it increased by 9%.
Today, Kazan is the second in terms of the price of long-term apartment rentals after Moscow, where on average rent costs 80 thousand rubles per month, according to the Yandex Rent service. The capital of Tatarstan is ahead of even St. Petersburg in terms of rental prices, with an average price of 35 thousand rubles per month.
The situation in the Kazan rental market began to change from the middle of summer 2023, said Roman Zhukov, the head of the Yandex Rent service. The Central Bank began raising the key rate, which greatly increased the monthly mortgage payment when buying an apartment on the secondary market and caused another increase in prices for apartments in new buildings. At current home purchase prices and mortgage rates, renting an apartment has become preferable to buying own one, especially in the secondary market. Many people who could afford an apartment with a mortgage, now began to make a choice in favour of renting.
“This led to an increase in demand in the rental market, which also overlapped with the traditionally high autumn season. As a result, the number of rental apartment offers in Kazan decreased by almost 2 times by the end of October 2023. And the active growth in rental prices continued until the end of 2023," Zhukov said. “For example, in six months, rental rates increased by 55% and averaged 40 thousand rubles per month.”
During the first months of 2024, rental prices in Kazan remain stable. Now the owners offer studios and one-room apartments in Kazan for an average of 31 thousand rubles per month, according to Yandex Rent. From July 2023 to February 2024, prices increased by 65%, but they remain stable in the spring.
The average rental price of a two-room apartment in the capital of the republic is now 40 thousand rubles per month. From July to October last year, prices increased by 33%, then the growth stopped. Prices for three-room apartments in Kazan continue to rise. From July 2023 to April 2024, rental rates increased by 49% and now average 70 thousand rubles per month.
Rental rates will continue to reduce the difference with mortgage rates until the price of renting an apartment reaches the market level and buying your own housing becomes more reasonable again. However, due to the inertia of the long-term rental market, this correction will occur at least throughout 2024, Zhukov forecasts.
Mortgages have become too expensive
“The cost of rent is always related to the cost of real estate, and in particular, not so much with the cost of housing, but with the interest rate on the mortgage," explains Ruslan Khabibrakhmanov, director of the Flat real estate agency. — Those who rent an apartment always have an alternative to buy an apartment with a mortgage, and pay essentially the same monthly payments, but for their own housing. But due to that mortgages are quite expensive today and the monthly payment is also very high, this affects the demand for rental housing.”
According to him, the upcoming BRICS forum, which is held in Kazan this year, is also putting pressure on prices. “Delegations are already coming to Kazan, who are also renting apartments on the market," he said.
Average mortgage payment is twice the rental price
Marat Gallyamov, the founder and director of Etazhi-Kazan real estate agency, identifies several trends that are having an impact on the rental market in Kazan.
According to analysts of Etazhi company, the average mortgage amount for an apartment in the secondary market of Kazan is on average 5.5 million rubles. Taking into account the current rates, the monthly payment averages 70-80 thousand rubles.
It is much cheaper to rent an apartment: studios and one-room apartments cost an average of 25-30 thousand rubles plus utilities, two-room apartments — from 35 thousand rubles and above. The final prices depend on the area, the level of the residential complex and the condition of the apartment, he notes.
The second trend is the washing out of the most liquid options from the database. “Usually, customers who had to postpone the purchase of their private housing, rent the most budget options, and at the same time, continue to save money to buy their apartment," Marat Gallyamov notes.
The third trend, which appeared because of the increased demand in the market, is an increase in requirements for tenants. Apartment owners set stricter conditions: they often request a deposit, include the cost of cleaning in it, and include insurance in the rental price. “To rent an apartment faster and do it at the most favourable prices, you need to immediately respond to new ads from the owners," he recommends.
The fourth trend, which is highlighted by Etazhi, is an abnormally stable demand for rent, traditional seasonal “peaks” of demand are levelled. “Demand usually decreases in early spring, but it was high the whole first quarter, and it is not declining yet," says Gallyamov. “For liquid properties, the demand for long-term rentals is high throughout the year, as Kazan is an attractive city for moving to study or work.” The expert predicts a further increase in demand in the summer months, which will be fuelled by tourist flows and students entering higher educational institutions of the city. Another surge is expected in early September, with the arrival of business season.
The most popular locations in Kazan today are Novo-Savinovsky, Vakhitovsky and Sovetsky districts.
“There are not enough hotels in Kazan”
“Rental prices have not increased so much, one can always find offers," says Anastasia Gizatova, the head of Schastliviy Dom real estate agency. “It's just that part of the rented apartments is constantly transferred to the short-term: it is more profitable for many to take over management or rent daily themselves, and therefore, the long-term prices catch up. A lot of objects are taken and then sublet. Especially objects with an interesting location.”
However, the main driver of growth, in her opinion, is precisely short-term rentals. “There are not enough hotels today, and if you have an apartment in Novo-Savinovsky, Vakhitovsky or Sovetsky district, tourists will be very willing to rent it," she says.