Demand for premium resort real estate in Sochi increases by 94%

At the end of 2023, the demand for the premium segment resort real estate in Sochi was 3 times higher than in 2020. According to an analytical study by FIVE, a resort real estate developer, during this period there was a 169% increase in transactions.

According to the research by analysts, the forecast demand for premium resort real estate over the past 4 years was expected to grow by 118%, which is 51% lower than the actual situation (+169%). Moreover, in just 11 months of this year, sales volume increased by 94%, exceeding the figure for 2020-2022, which was 75%. This is due to the emergence of new high-quality projects.

In 2023, 8 projects with serviced apartments appeared in Sochi. While in 2022 their number was 3. However, there was no increase in the number of residential real estate projects.

Its weather that stays comfortable throughout the year is another factor that determines the city’s leadership position. The climatic features of the location attract buyers who are interested in opportunities not only for active or relaxing holidays, permanent residence, but also for health improvement regardless of the time of year. Therefore, interest in resort real estate and specifically in serviced apartments is growing.

The increase in the cost of premium serviced apartments in 2022 in Sochi amounted to 28% due to a sharp reorientation of demand from the external market to the domestic one, and in 2023 it was just +0.4%. Prices stabilised due to the growing demand being met. At the same time, the cost of business class lots in 2022 increased by 12%, and in 2023 it increased by 0.8%.

«According to our observations, this year the demand for resort serviced apartments of the highest price segment increased by 169% compared to 2020, when no one could imagine that Sochi would overtake the largest tourist locations in the world in terms of price. Moreover, it is natural that consumer interest has reoriented from the built-up Central district of the city towards the Sirius Federal Territory and the Krasnaya Polyana Resort,» comments Elena Kabesheva, commercial director of FIVE, a property developer.

The most popular lots at the resort are serviced apartments with an area of up to 50 sq. m with combined kitchen and living room and a bedroom. Most often, these lots are purchased for investment purposes or for seasonal stays with a family. Buyers of serviced apartments consider them primarily for the purpose of generating rental income rather than for resale.

«Resort serviced apartments are gaining a foothold in the market as an independent format of investment property. In addition, the projected increase in tourist flow from 7 million people in 2022 to 8 million in 2023 only strengthens the trend towards the development of this product as the most attractive one for investment. The final figures, taking into account statistics from December 2023, may show an even greater increase year-on-year,» noted Elena Kabesheva.