Higher Transactions & Growing Demand For Property in Belarus
Article: Tight regulations and a growing economy make real-estate investment in Belarus desirable but difficult.
The health of an economy can be judged by the condition of its real-estate market, and 2012 was good to Belarus. Growth in demand, especially for residential property, led to greater volumes and a higher number of transactions.
Minsk- Capital of Belarus
Investors who view real estate as a safe haven in a time of economic uncertainty probably caused the increased activity in Belarus’ real-estate markets.
- There was an increase in sales of secondary market apartments in Minsk as well as the country as a whole.
- According to records, transaction prices in 2012 were around 15% higher than the preceding 3 years.
Residential property in Belarus
- The average selling price per square meter (psm) for an apartment in Minsk in 2012 was between USD $1,230 and $1,250.
- The price in 2011 was between USD $1,260 and $1,310 and in the range of USD $1,260 – $1,370 in 2010.
- Apartment prices are not likely to increase significantly in 2013.
Trends in 2012
- In the secondary housing market, the difference in offer and selling prices was 10%, double the traditional difference.
- Substantial growth in demand for rental housing, particularly pronounced in Minsk, was also observed in regional areas.
- The number of people wishing to rent increased considerably – rents jumped by 20% to 50%.
Commercial real estate
Minsk is the main commercial center and offers a wide selection of office property.
Laws about property include the following:
- Land cannot be sold – only buildings
- Only citizens of Belarus and Russia can buy property
- For joint-venture companies, the Belarusian partner is allowed to acquire property
Rental prices per square meter (psm) for commercial property
Most foreign companies prefer to rent office space or to use business centers. The average cost of renting varies:
- EUR €29 to €31 psm for Class A space
- EUR €15 to €19 psm for Class “B” space
- EUR €14 to €16 psm for Class “C” space
Average rental rates in retail stores and shopping centers have been increasing steadily, rising from EUR €22 psm in January to EUR €27 to €28 psm in December as a result of new high-value facilities.
Purchase prices per square meter (psm) for commercial property
As a result of new demand, the average price of office space has grown from EUR $1,500 psm to EUR $1,700 psm.
Belarus retail sector
The opening of several multipurpose retail facilities is expected to attract well-known brands from overseas.
- According to property consultants Colliers International, the shortage of high quality shopping space is a main inhibitor for large international brands entering the country.
- In 2013, they expect 16 new shopping facilities offering a total floor area of more than 160,000 m².
- It is believed that ZARA, the well-known Spanish apparel brand, is looking at retail space in Minsk to enter the Belarusian market.
- Monthly rates at the most popular malls are in the range of EUR €50 to €55 psm and the average is EUR €28.
The bottom line
Because of the restriction on property ownership, renting is the only viable option for foreigners. There is no scope for real-estate investment for foreign investors.