Several real estate experts said that rent deregulation can lower market rents to 60-50% of the current rates due to higher supply.
Our view:
As the deregulation is gradual, i.e. beginning from 2007 to 2011 we do not expect any dramatic impact on the market rents. Also, the quality of the regulated flats is lower compared to market flats as people did not invest any money into renovations. Market rents are 4 times above the regulated rents on the average. The average increase in regulated rents is planned at c19.5% in 2007.