The Rental Market's Winter Chill: A Look at Declining Prices and IT Workforce Development
December 13, 2024, 10:59 pm
As winter blankets the rental market, prices are slipping like ice off a roof. In Russia, the long-term rental prices for apartments have dipped by 2-3% over the past month. This decline isn’t just a seasonal hiccup; it’s a response to the ebbing demand from renters and a surge in available listings. The market is feeling the chill, and it’s expected to continue through December and January. However, come February, the frost may thaw, and prices could rise again.
In December, the average rent for a one-bedroom apartment across 18 major regional markets in Russia settled at 32,300 rubles per month. Two-bedroom apartments averaged 46,100 rubles. Compared to November, this marks a 2% drop for one-bedroom units and a 3% drop for two-bedroom units. This downward trend has persisted for three consecutive months. Since September, one-bedroom rents have fallen by 4%, while two-bedroom rents have seen a 6% decrease.
According to "Etazhi," the average cost of one-bedroom apartments in million-plus cities in December was 32,200 rubles, down 1.1% from November. "Avito Real Estate" reports a median rental price of 33,000 rubles, reflecting a 6% decline over the past month. "Yandex Rent" also noted a 3% drop in average rental prices across major cities, bringing the average to 38,000 rubles.
The high season for rental properties in Moscow has come to a close. Yet, property owners are hesitant to drastically lower their prices. About half of them may reconsider their pricing strategies, while the rest seem content to wait for a resurgence in renter interest. The current rental prices in Moscow are still perceived as inflated.
As the year winds down, many landlords are eager to rent out their properties before the New Year celebrations. This urgency could lead to a slight stabilization in the market, which has been overheated in the fall. The rental landscape is further complicated by an influx of properties from the secondary market. Investment apartments are entering the fray, contributing to the growing supply.
December and January are traditionally low seasons for long-term rentals, coinciding with holiday vacations. If property sales remain stagnant, rental prices may continue to decline. However, if prices drop further, the trend could reverse, leading to a price increase in the spring.
As the holiday season approaches, there’s a noticeable spike in interest for short-term rentals. Travelers are flocking to various destinations within Russia, driving up demand for temporary accommodations. The rental market is a delicate dance, influenced by seasonal rhythms and economic currents.
On another front, the Ministry of Digital Development in Russia is gearing up for a significant push in IT education. By 2025, the ministry plans to ramp up the training of IT specialists. The IT sector in Russia has been growing at a breakneck pace, outpacing other major economic sectors. In the first half of 2024 alone, the industry saw a staggering 63% growth compared to the same period last year.
Over the past four years, the ministry has doubled the number of budget spots for IT specialties in universities. This year, 125,000 students were admitted on a budget basis, with an additional 70,000 enrolled in paid programs. Currently, over 600,000 students are studying IT across 500 universities.
In schools, around 400,000 children have completed free programming courses through the "Code of the Future" initiative. Many of these students have gone on to pass their state exams in informatics and enroll in IT programs at universities. Specialized "digital departments" have been established in 100 universities, allowing students from other fields to gain IT qualifications. Over 200,000 students have benefited from this initiative.
Looking ahead, the ministry plans to introduce mandatory teaching requirements for IT companies benefiting from tax incentives. This includes a commitment to provide a certain volume of teaching in universities and mandatory internships for students. There are also plans to increase funding for disciplines related to applied mathematics, physics, and radio electronics.
To address the skills gap in the IT sector, the ministry will finance the training of 10,000 specially selected students to become leading engineers in artificial intelligence technology. Additionally, a state textbook on informatics will be introduced in schools, focusing on domestic solutions.
From January 1, 2025, the ministry will launch an experiment allowing software developers to validate their skills and obtain IT competency certificates. This initiative aims to tackle the labor market imbalance in the IT sector, making it more transparent and providing new opportunities for all participants.
Estimates suggest that the Russian IT sector is short between 740,000 and 1 million specialists. By 2030, an additional 2 million trained professionals will be needed. In response to this shortage, IT companies are increasingly covering the costs of training future employees. The competition for talent is fierce, with a significant focus on recruiting from universities.
In summary, the rental market is experiencing a winter freeze, with prices falling as demand wanes. Meanwhile, the IT sector is gearing up for a major educational overhaul to meet the growing demand for skilled professionals. Both markets are navigating their own challenges, but the potential for growth remains on the horizon.
In December, the average rent for a one-bedroom apartment across 18 major regional markets in Russia settled at 32,300 rubles per month. Two-bedroom apartments averaged 46,100 rubles. Compared to November, this marks a 2% drop for one-bedroom units and a 3% drop for two-bedroom units. This downward trend has persisted for three consecutive months. Since September, one-bedroom rents have fallen by 4%, while two-bedroom rents have seen a 6% decrease.
According to "Etazhi," the average cost of one-bedroom apartments in million-plus cities in December was 32,200 rubles, down 1.1% from November. "Avito Real Estate" reports a median rental price of 33,000 rubles, reflecting a 6% decline over the past month. "Yandex Rent" also noted a 3% drop in average rental prices across major cities, bringing the average to 38,000 rubles.
The high season for rental properties in Moscow has come to a close. Yet, property owners are hesitant to drastically lower their prices. About half of them may reconsider their pricing strategies, while the rest seem content to wait for a resurgence in renter interest. The current rental prices in Moscow are still perceived as inflated.
As the year winds down, many landlords are eager to rent out their properties before the New Year celebrations. This urgency could lead to a slight stabilization in the market, which has been overheated in the fall. The rental landscape is further complicated by an influx of properties from the secondary market. Investment apartments are entering the fray, contributing to the growing supply.
December and January are traditionally low seasons for long-term rentals, coinciding with holiday vacations. If property sales remain stagnant, rental prices may continue to decline. However, if prices drop further, the trend could reverse, leading to a price increase in the spring.
As the holiday season approaches, there’s a noticeable spike in interest for short-term rentals. Travelers are flocking to various destinations within Russia, driving up demand for temporary accommodations. The rental market is a delicate dance, influenced by seasonal rhythms and economic currents.
On another front, the Ministry of Digital Development in Russia is gearing up for a significant push in IT education. By 2025, the ministry plans to ramp up the training of IT specialists. The IT sector in Russia has been growing at a breakneck pace, outpacing other major economic sectors. In the first half of 2024 alone, the industry saw a staggering 63% growth compared to the same period last year.
Over the past four years, the ministry has doubled the number of budget spots for IT specialties in universities. This year, 125,000 students were admitted on a budget basis, with an additional 70,000 enrolled in paid programs. Currently, over 600,000 students are studying IT across 500 universities.
In schools, around 400,000 children have completed free programming courses through the "Code of the Future" initiative. Many of these students have gone on to pass their state exams in informatics and enroll in IT programs at universities. Specialized "digital departments" have been established in 100 universities, allowing students from other fields to gain IT qualifications. Over 200,000 students have benefited from this initiative.
Looking ahead, the ministry plans to introduce mandatory teaching requirements for IT companies benefiting from tax incentives. This includes a commitment to provide a certain volume of teaching in universities and mandatory internships for students. There are also plans to increase funding for disciplines related to applied mathematics, physics, and radio electronics.
To address the skills gap in the IT sector, the ministry will finance the training of 10,000 specially selected students to become leading engineers in artificial intelligence technology. Additionally, a state textbook on informatics will be introduced in schools, focusing on domestic solutions.
From January 1, 2025, the ministry will launch an experiment allowing software developers to validate their skills and obtain IT competency certificates. This initiative aims to tackle the labor market imbalance in the IT sector, making it more transparent and providing new opportunities for all participants.
Estimates suggest that the Russian IT sector is short between 740,000 and 1 million specialists. By 2030, an additional 2 million trained professionals will be needed. In response to this shortage, IT companies are increasingly covering the costs of training future employees. The competition for talent is fierce, with a significant focus on recruiting from universities.
In summary, the rental market is experiencing a winter freeze, with prices falling as demand wanes. Meanwhile, the IT sector is gearing up for a major educational overhaul to meet the growing demand for skilled professionals. Both markets are navigating their own challenges, but the potential for growth remains on the horizon.