Saint Petersburg Real Estate Market Overview

The socialization of property changed the psychology of the Russian people. Because buildings were handed over to the State and people were essentially being provided with accommodation for free, they quickly lost the perception that property was something to maintain and take care of. The attitude persisted that, "if it isn't mine, why should I bother taking care of it?" Besides, State service organizations were officially responsible for maintaining the buildings and apartments.

This centralization of the administrative and social functions connected to housing led to catastrophic results: the municipal housing economy became absolutely inefficient and remains so to this day. Another reason for the poor physical state of property in the city can be traced to the low income level of the majority of owners - preventing them from making the proper repairs and maintenance.

renovated facades on Shvedsky pereulok

Over the years, it has become excruciatingly apparent that the organizations controlled and financed by the government are not able to efficiently manage the city economy. As a result, a significant number of buildings in the center of the city have been neglected. It is extremely typical to find faded facades with crumbling decor elements, broken doors and broken stairwell windows, caved-in steps and peeling walls of what were once luxurious front entrances. The interiors of the buildings frequently have shabby wiring, rusty pipes, flooded basements, leaking roofs and dirt and garbage in stairways and yards. All of this wonderful decay can be seen in close proximity to St. Petersburg's luxurious architectural monuments and 5-star hotels. Indeed, St. Petersburg is a city of contrasts.

a newly renovated courtyard between Nevsky Prospect and Italianskaya Street

Lately, the Russian authorities, President Putin in particular and Valentina Matvienko, the new governor of St. Petersburg have made a good effort to change the situation.

Malaya Sadovaya pedestrian area

Facades are being renovated, yards being repaired, and new pedestrian zones being constructed in the center of the city. However, this is still not enough.

The situation will slowly right itself as more condominiums are organized. However, the creation of condominiums is limited by the different social levels of the building's tenants. The problem will be solved as the social level becomes more even with the arrival of new investors. This problem has initially been solved for new buildings in which there have been no previous tenants.

While assessing the physical condition of a building in general and a separate apartment in particular, a prospective buyer or investor should assess the following:

Due to the tunneling of the metro, bridge and embankment construction, the general weakness of the ground and damage caused during the war, many buildings have started to fracture or crack. It is important to assess the dynamics of fracture or crack development - especially the amount of cracks. Cracks inside apartments are undesirable.

There are several types of structural floors:

1 - arched brick ground floors
2 - wooden beamed
3 - metal combined with wood beams
4 - metal combined with concrete beams
5 - reinforced concrete panels
6 - solid-cast reinforced concrete

The least desirable type are wooden floors, however, if they are dry and in quite good condition, they are practically as good as metal beamed floors. If they are in bad condition (considerable beam deterioration) it is necessary to replace them or to reinforce them using metal beams.

However, the decision to purchase or not to purchase should usually be based more on the first 2 factors rather than the last 3. This is because the latter can be righted with relative ease.

The main limiting factors when selecting property for investment in St. Petersburg are the physical condition of the building itself and the social status of the neighbors.

The physical condition of most of the city's buildings is quite low and the social status of tenants varies greatly. Apartments in buildings in which both of these problems have been resolved cost far more than apartments in typical city buildings - however the condition of residential real estate is slowly improving as is the standard of living in St. Petersburg.