Compact and budget-friendly: what apartments do Russians prefer to buy?

Almost a quarter of Russians (24%) are currently considering acquiring an apartment, according to a survey carried out in cities with a population of over 500,000 by Sberbank subsidiary SberInsurance. The majority of the residents in these cities are aiming for one-room apartments on the secondary market and expect to spend on average approximately RUB 1.9 mn on new housing.

The greatest number of Russians who are considering purchasing a new apartment and who responded positively to the question (approximately 30% households) lives in Saratov and Penza. High interest in purchasing urban property was also recorded in Voronezh (28%), Omsk (27%), Tyumen (27%), Yekaterinburg (27%), Barnaul (27%), Moscow (26%), Krasnoyarsk (26%), and Ulyanovsk (26%).

Sixty-one percent of respondents plan to buy an apartment on the secondary market, with residents from Yekaterinburg, Irkutsk, Tomsk, Tyumen, Khabarovsk and Chelyabinsk as the exception - over 50% of respondents from these cities stated that they are more interested in new buildings.

Traditionally, one-room apartments are the most popular, due to their relatively low price and the fact that real estate buyers are often young people. More than half (53%) of respondents are currently aiming for one-room apartments. Another third (33%) are looking for two-room apartments, while 13% are shopping for three-room apartments.

On average nationwide, the respondents are willing to spend RUB 1.9 mn on a one-room apartment, RUB 2.8 mn on a two-room apartment, and RUB 3.8 mn on a three-room apartment. The average expected price for one square meter of housing across the country is RUB 60,200. Muscovites are willing to pay more per square meter (RUB 158,200). Residents of St. Petersburg (RUB 114,100), Vladivostok (RUB 105,600), Kazan (RUB 83,900), Krasnodar (RUB 83,300), Tyumen (RUB 83,300), Khabarovsk (RUB 83,300), Nizhny Novgorod (RUB 65,500), Yekaterinburg (RUB 63,300), and Novosibirsk (RUB 62,200) also have high price expectations.

Thirty-five percent of respondents plan to take a mortgage out on a new apartment, while the rest intend to rely on their own savings, loans from friends, and financial support from relatives. At the same time, while insurance is mandatory when purchasing an apartment with a mortgage, approximately 8% of respondents insure their own housing on average. There is a certain level of overlap between the highest figures in terms of voluntary insurance and the regions with the most expensive prices per square meter. Fifteen percent of respondents have taken out a housing insurance policy in Moscow, 13.9% in St. Petersburg, 12.3% in Kazan, 11.1% in Samara, 10.2% in Chelyabinsk, and 9.5% in Vladivostok.

The study showed that the bulk of potential apartment buyers in almost all major and medium-sized Russian cities are local residents, who make up 84% of apartment buyers on average nationwide. Even in the capital, contrary to popular opinion, Muscovites account for 85% of demand. Buying housing is a long-term investment that requires a large amount of financial resources. If something happens with an apartment, there is no way to avoid further expenses. Insurance assists in protecting you from contingencies. Total payments under real estate insurance programs in the first half of 2021, including SberInsurance's mortgage program, rose by 14% and surpassed RUB 0.5 bn.

Denis Kuzmin

Director of Protective Products and Services, Sberbank

Home Protection is an online policy builder that lets users tailor an insurance policy customized to their needs with coverage of up to RUB 2.9 mn. You can insure your apartment, home, or summer cottage by taking a policy out at any Sberbank branch, via the SberBank Online mobile app, or on the SberInsurance website in a matter of clicks. You can take out subscription-based insurance on the app for the period during which you will need the insurance, whether that is a month, a quarter, or a year.

The settlement process can also be completed on SberBank Online, from submitting the insurance claim to receiving the payment. The processing time for claims submitted online drops to five days on average.

The study was carried out by phone survey (CATI) in 37 cities in Russia with a population of over 500,000 in July 2021.