When demand falls, prices follow suit. It’s a central economic principle that also applies to Moscow’s housing market, with one exception: a small district that is home to increasingly annoyed German diplomats and expatriates.
A dark green metal gate in view of multiple surveillance cameras shields the estate known as the “German Village” from the bustle of the Russian capital’s Vernadskovo Prospekt. For a long time this district, owned by the German government, had a German baker that made home deliveries, along with a mock rustic German pub called “Deutsches Eck” or “German Corner,” where expats, teachers and diplomats met to wash down their Nuremberg sausages with German beer.
But this Teutonic idyll, a quiet island cut off from the harsher realities of Moscow life, is under threat.
Elsewhere in the city, rents are falling because of the economic crisis sparked by Western sanctions and the slump in oil prices. But in the German Village, rents are set to increase even though most tenants already pay around twice as much in euro terms as the Russians living in the surrounding, rather upmarket areas. The landlord, the German government in this case, is steadfastly resisting increasingly desperate calls from tenants to lower the rents, and is resorting to some rather absurd arguments to defy the logic of the Moscow rental market.