Russia is not only booming economically, but the real estate market is following suit and now offers strong potential for early investors
The biggest drawback to investing in emerging markets is that they are emerging... That is to say the risk attached to the unknown, as no one really knows what an emerging market is emerging into, or if it is going to get so far and then fizzle out. Russia cuts down on a lot of this risk because of its vast natural resources that will keep the economy growing strongly long into the future.
Moscow is one of the world's premier cities, rich in some of the world's oldest and most beautiful architecture, cafés, plenty of banks and a growing retail sector.
Thanks to Russia's geographically central location, businesses large and small are beating a path to take up residence in Moscow and the other major cities like St Petersburg. This is leading to strong demand for office space, industrial spaces and for some, retail spaces, as well as residential property. This increased demand is helping the recovery and creating a ready-market for property investors to buy into.
In terms of residential property investment in Russia, the trend has been to buy luxury real estate in Moscow, which has seen sharp price falls in the last 4 years. However, more and more savvy investors are looking outside the capital to St Petersburg, where prices are lower and the chance of capital growth and good rental yields high. Prices are still falling in St Petersburg but this is expected to turnaround as more and more investors spot the opportunity.
Buyers of property in Russia are now taking advantage of our expertly vetted developments now on offer at unbeatable prices.
So Why Are People Buying Property in Russia
Lest we forget before the Cold War Russia was a superpower on a par with the USA, and anyone who thinks it won't be again in the future could well be in for a shock... Here's why:
Russia is the largest country in the world, bigger than the USA and the rest of Europe put together. It has a population of 142 million making it the 9th most populous country in the world. It has the world's largest natural gas reserves, the 2nd largest coal reserves and the world’s 8th largest oil reserves, making it the world's leading natural gas exporter and the second leading oil exporter.
Russia is already the 7th largest economy in the world by purchasing power parity (2010), with the 2nd highest gold and foreign exchange reserves (US$479.4 bln – 2010). It also has huge amounts of mineral reserves including platinum, nickel, aluminium, iron ore, copper gold and diamond. All this makes Russia constantly attractive to investors, and with property prices falling by around 20% during the crash property investors are keen to get in on the action.
Further information and resources
A simple guide to buying property in Russia. The Russia property Buyers Guide gives you an overview of what to expect when buying property in Russia.
Many buyers of property in Russia seek finance for their investment. This section looks into the finance options available for the purchase of property in Russia.
Intelligent currency exchange can save Russia property buyers thousands when transferring funds overseas. Due to our partnership with a major international FX company, clients can transfer funds efficiently.
News articles regarding property in Russia and related subjects useful to property investors. This information will help you to keep up-to-date with the property market prior to a purchase in Russia.
Today's investor is looking for stability and growth. Between 2000 and 2010, Russia’s GDP growth has averaged 5.3% per year, even taking into consideration the 7.8% fall in 2009. Russian GDP has consistently been above the world average (see table below), including its biggest growth during this period of 8.5% in 2007, when the world's economies averaged 6.03% in comparison (ROSSTAT Data). Thanks to the strengthening ruble, in dollar terms the 1999-2007 GDP growth was an astounding 26% per year, far outstripping international growth rates.
Foreigners considering buying property in Russia as an investment will most probably be looking at residential buy to let in a major city, so strong and stable economic growth is necessary as it translates into more jobs, more affluence and ultimately more demand for quality properties to rent. With its massive population there is certainly a big enough pool of potential tenants, but more than that Russia is also one of the largest consumer markets in the world. Here are some facts from invest.gov.ru:
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