Starting January 1, the construction of small apartments will be banned. How will this impact housing prices?

In Moscow, the ban on the construction of small apartments took effect on August 1. Almost immediately, there were discussions about the likelihood of micro-apartments becoming more prevalent in the Moscow region. Developers are expected to fill this gap in the area. However, this will not happen. Starting January 1, 2025, a similar ban will be implemented in the Moscow region. Just like in the capital, it will be prohibited to build houses with apartments and studios smaller than 28 square meters. Thus, a clear trend toward abandoning the construction of small housing has emerged.

— This new regulation will not affect projects that have already been approved. Since the announcement of this decree, projects that included lots smaller than 28 sq. m have gone back for redesign. This may lead to a slowdown in the pace of new project launches in the near future, — explained Svetlana Komissarova, head of the Analytics department at Est-s-Tet.

Many developers working in the comfort and business class housing segments had previously included such apartments and studios in their projects. This is due to the high demand for compact lots with minimal budgets in the product range.

— Additionally, at the design stage, studio-format lots allow for the optimization of usable floor area, balancing the assortment of planning solutions (for example, reducing the number of apartments with excessive area that could later become unsellable), — added Svetlana Komissarova.

She provided the following figures: apartments up to 28 sq. m accounted for 13% of demand and 12% of supply in the primary market of the Moscow region in the third quarter. Currently, their share in the supply structure remains at 12%. The maximum share of such apartments in the primary market of the Moscow region is in the standard class (15% of supply and 17% of demand). In the comfort class, these lots account for 12% in both supply and demand. In business-class projects in the primary market of the Moscow region, such apartments are not in demand at all, comprising only 7% of the supply.

— A number of developers who previously designed small spaces up to 28 square meters have moved to redesign. As for the builders, this will undoubtedly lead to longer timelines for bringing new projects to market. Changes will be needed in project solutions and concepts. Overall, the trend toward abandonment indicates that we will ultimately receive higher-quality housing, with fewer "ant hills" lacking basic infrastructure. A smaller number of apartments on the site is a plus, and you won't have to wait long for the elevator, — shared Yana Glazunova, CEO of VSN Group.

In the Moscow region, Svetlana Komissarova reported, there is still a significant share of apartments up to 28 sq. m on the market. At the same time, no surge in demand is expected. There was also no spike in demand for them in the region following the announcement of new design regulations in the summer.

Given the restrictive mortgage rates (under standard programs), the most financially capable demand is shifting to Moscow. For cash buyers, micro-apartments in Moscow and New Moscow are more attractive in terms of liquidity. It is essential to understand that very compact apartments are indeed inconvenient for living and increase the burden on the surrounding social infrastructure.

— In the region, this will primarily lead to a gradual increase in the minimum cost of the "entry" ticket to the housing market as such apartments are phased out. Combined with rising mortgage rates, the cancellation of state-supported mortgages, and changes in the rules of the game in the mortgage market, this will result in a "cooling" of demand. This applies to both potential investors and end buyers who were acquiring such micro-apartments for future use, for instance, for their growing children. It is also necessary to understand that the price per square meter for the most compact lots has always been the highest. The price increase for them will be limited by the price levels of "similar" lots — those measuring 29–30 sq. m, — added Svetlana Komissarova.

This ban is expected to lead to an increase in the prices of small apartments on the secondary market, as their quantity will become limited. Otherwise, no significant changes are anticipated, as it is focused solely on the small housing market. This conclusion was made by Maxim Lazovsky, founder of the "Investments Lazovsky" project.

— I would note that demand for such studios may start to rise right now. They will attract the attention of investors who want to purchase them not on the secondary market, but on the primary market. This could happen as early as December, — said Maxim Lazovsky.

The average cost of lots will increase across all segments. However, if we talk about elite projects, apartments of 28 meters have never been offered there. In the comfort and business segments, where there was a small layout, the average lot price will increase simply due to the increase in average area. This forecast was made by Yana Glazunova.

Overall, in her opinion, the move away from tiny apartments is a positive trend. Such sizes will likely remain in hotel-type apartments that are purchased for rental purposes. This is the optimal layout for them.

— In the current circumstances, there are no grounds to expect a rise in prices for apartments smaller than 28 sq. m in the Moscow region. In general, analyzing the primary real estate market in the Moscow region, there is currently no shortage of studios. In projects that have received construction permits, there are enough for implementation over an extended period. The situation may change in the next two years. The number of studios will decrease, and the resulting shortage will lead to price increases, — explained Ksenia Grishkovets, head of the marketing research department at "Glavstroy Regions."

In the comfort class segment, a spike in demand for such housing was observed at the time of the announcement of the news about the introduction of restrictions, which temporarily led to a price increase. However, this did not develop into a sustained trend.