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24 Feb, 2009 18:32

Prices slump as sellers pull housing off the market

House prices in Moscow this month have suffered their biggest ever fall according to a new report. Average list rates slumped 5% in a fortnight, with estate agents adding much more can come off in negotiations.

Property analysts, Doki, who compiled the report say the Rouble's tumble against major currencies should have pushed Moscow prices up. But downward pressure from the economy is so strong that the first half of February still saw a historic plunge, according to Doki CEO, Valery Barninets.

“We've seen record price falls even though after devaluation everyone expected prices to go up.”

Analysts chart starting prices. Estate agents say in current conditions buyers should do some serious haggling. Ekaterina Thain, Partner at Knight Frank says other world capitals are suffering even more.

“London was second place, now it's in third place. Monaco will stay number one in terms of price, and Moscow and London will just be second and third place changing.”

Going forward Russia's largest estate agents have best and worst-case scenarios, according to Aleksey Shlenov, CEO, of Miel-Brokerage

“Our optimistic scenario is that Moscow prices will bottom out in May. The second scenario is prices will slide another 25% to autumn.”

Sellers who can afford to wait take their properties off the market. The number of flats on offer in Moscow has shrunk from 42,000 in December to 30,000.