As an investor it is important to consider the growth potential of your chosen property in Russia and understand exactly what drives this growth.
The Russian economy has proven extremely resilient to the financial crisis. After only a short recession that cost it 7.8% of its GDP the economy has grown by over 9% since, including full year growth of 4.3% in both 2010 and 2011 according to the IMF, and 4.9% 4.0% in Q1 and Q2 of this year respectively according to the Federal State Statistics Agency (Rosstat).
Resources and Exports
Exports in Russia increased to 44100 USD Million in October of 2012 from 44045 USD Million in September of 2012 as reported by the Central Bank of Russia. Exports reached an all time high of 51338 USD Million in December of 2011 after falling sharply in 2009. The country is the world’s largest oil producer and the biggest exporter of natural gas, nickel and palladium. Energy sales contribute almost half of Russia’s budget revenue.The Russian fishing industry is the world's fourth-largest. Main export partners are Netherlands, Germany and Italy. Below is a chart of Russian export levels in the last decade
The capital growth of Russian potential of Russian property has proven phenomenal. Data from Rosstat shows an incredible 436% growth in secondary market prices between 2000 and 2007, while primary market prices grew 362% during the same period. Prices took a heavy hit during the financial crisis, but indications are that a bottom is being found. Indeed according to Rosstat data apartment prices across the country grew by an average of 7.88% during the year to end Q1 2012. If this is indeed the start of a new growth cycle then investors could be in for some serious capital gains, especially as the economy is firmly in the recovery.
Reasons Why Russia is an Intelligent Property Investment Location:
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