EN
12.02.2025

The demand for apartments in St. Petersburg has slowed down.

The supply volume in the primary market of serviced apartments in St. Petersburg at the end of 2024 amounted to 140,000 sq. m, or 4,700 lots, according to NF Group. This is the highest result in the last 5 years. Over the year, the supply grew by 26% in area and 35% in the number of lots.

At the same time, the number of projects continues to grow. The expansion of the offering was driven by high developer activity in launching new projects. During 2024, the market was supplemented with 11 new serviced apartment complexes, the largest of which were Saan (Hansa Group), "Well Moskovskiy" ("Artik"), and Industrial Avenir (Psk Group), as well as new buildings of already presented properties such as Avenue Apart Pulkovo and Hideout Residence.

According to Olga Ryankel, head of research at Nikoliers, the share of apartments significantly increased in the past year, reaching 17% (+6 percentage points over the year) of the total number of lots on sale in the St. Petersburg real estate market. "At the same time, the average area of a lot for sale decreased to 34 sq. m," she says.

Over the year, according to NF Group's estimates, the average price of offers in the primary serviced apartment market in St. Petersburg increased by 6%, reaching 276,000 rubles per sq. m.

Despite the rise in the key interest rate and the general increase in the cost of money, especially in the second half of last year, there was no significant drop in sales (as in the market for residential housing). A total of 2,200 lots with a total area of 62,100 sq. m were sold, which is 10% fewer in quantity and 6% fewer in area than the 2023 figures.

However, this year, experts estimate that the decline will continue. Starting from January 1, 2024, all accommodation facilities, including apart-hotels, are required to undergo classification. This means that apartments must be transferred to a management company and be under unified management.

"This is a serious challenge for the market: private investors who previously rented properties on a daily basis will lose this opportunity. This may reduce interest in apart-hotels as an investment asset," says Ekaterina Zaporizhchenko, CEO of the consulting company "PRO Apartments."

According to Vitaly Korobov, CEO of ELEMENT, there will always be demand for serviced apartments in St. Petersburg from investors. "This especially applies to small projects with fine layouts in tourist-attractive locations. According to our forecasts, in the coming months, the demand for serviced apart-hotels will increase. Banks will systematically begin to lower deposit rates, so some investors who have kept their money under 20–22% since the end of last year will return to the real estate market — a market that is quite understandable and stable in terms of investments — with increased funds," says the expert.

"The St. Petersburg market still has great potential from the perspective of developing tourist infrastructure because new projects are not realizing classic hotels, and the tourist flow is only growing," notes Yana Lepyoshina, head of sales for income projects at Becar Asset Management.

The apartment market is far from saturated, believes Sergey Sofronov, commercial director of Psk Group.

"Regarding investor demand, things are quite interesting. The apartment market in square meters is 15 times smaller than the housing market. But the number of apartment sales is noticeably reflected in the general statistics for all purchase agreements. If we compare the supply volume and actual transactions in the apartment and residential real estate segments, and derive a kind of affinity coefficient, then the coefficient for apartments will be higher," he says.

Source