Why Invest In Russia?

Find out below why Russia is currently offering such a strong investment option for international real estate buyers.


Why Invest In Russia?

Find out below why Russia is currently offering such a strong investment option for international real estate buyers.

Russia's economy suffered only a short recession, losing 7.8% off its GDP in 2009, which has since been more than recouped by the last 2 and a half years of solid growth. Unlike the property market, which suffered price falls of around 20% between 2008 and 2011. This combination of low prices and a resurgent economy have investors sitting up and taking notice.

Advantages of Russia Investment

  • Russia has over 139 million people, whose incomes are increasing every year.
  • Russia is recognized as the 9th consumer market for its size by World Economic Forum in 2010-2011.
  • And yet, domestic consumer market has yet to fully mature as only 14.4% of the adult population have a credit history (World Bank).
  • Russia was ranked tenth among developing countries in the A.T. Kearney Retail Trade Index 2010: "Russia remains Europe's largest consumer market, with rising disposable incomes and an expanding middle class, and it offers massive growth opportunities for retailers with a long-term approach."
  • "In 2010 sales of foreign brands produced in Russia grew by 73% in unit terms and by 100% in monetary terms. In 2011 this same data point may be between 40% and 80% in unit terms." (PricewaterhouseCoopers study).
  • Solid economic growth โ€“ 4-4.5% at present avg 5-6% last 10-12 years.
  • Favourable tax regime for global corporations that establish themselves in Russia
  • Property market is on the turn, strong potential for capital growth
  • Strong rental yields of 6% and over in well chosen locations
  • 15 Special Economic Zones, 4 for the tech ind., 2 industrial, 6 tourism, and 3 port zones.
  • Visa free entry and stay from: Armenia, Azerbaijan, Belarus, Cuba, Kazakhstan, Kirghiz Republic, Moldova, Tajikstan, Ukraine and Uzbekistan. Visa free entry for up to 90 days from many more, visit this link for a full list
  • International schools, advanced telecommunications systems and modern roads make for an ideal living environment
  • Easy access via dozens of airports and direct flights
  • Strong macroeconomics:
    • World's 7th largest economy by purchasing power parity (2010)
    • World's 2nd highest gold and foreign exchange reserves (US$479.4 bln - 2010)
    • Significant Government Reserve (US$60.5 bln - 2009) and National Welfare (US$91.6 bln โ€“ 2009) Funds
  • Politically stable system:
    • Long period of prudent economic and social policies
    • Respectful and fair foreign relations policy
    • Russia is a member of G8, the United Nations, APEC, SCO, and the CIS
  • Social stability and nationwide support:
    • Steadily rising quality of life
    • Prudent social policy devoted to improving all aspects of quality of life
    • The country has a tolerant multi-ethnic, multi-cultural and multi-confessional population.
  • Vast Natural Resources:
    • 32% of explored world reserves of natural gas (1st place)
    • 35% world gas production and exports (1st place)
    • 1st place in oil production and 2nd place in oil exports
    • 18% of world reserves of oil (7th place)
    • 23% of explored world reserves of coal (1st place)
    • 47% of world reserves of peat (1st place)
    • 23% of world forest resources (1st place)
    • 1st place in sodium salt reserves and 2nd place in potassium salt reserves
    • 1st place in drinking water reserves and 2nd place in fresh water reserves
    • 1st place in the stocks of pollacks, crabs and sturgeons in the 200 mile economic zone and 2nd โ€“ 3rd place in the stocks of codfish, herring, capelin, polar cod, salmon, etc.
    • 1st place in world explored reserves of tin, zinc, titanium and niobium
    • 1st place in world reserves and production of nickel ore and refined nickel
    • About 28% of explored world iron ore reserves (1st place)
    • 1st place in steel exports and 3rd place in exporting rolled metal products
    • 1st place in primary aluminum production and exports
    • 1st place in nitrogen fertilizer exports, 2nd and 3rd place in the exports of phosphate and potash fertilizers, respectively
    • 1st place in world diamond reserves and 2nd place in world diamond production
    • 1st place in actual volume of diamond exports
    • 1st place in explored world silver ore reserves
    • 2nd place in explored world gold ore reserves
    • 2nd place in explored platinum ore reserves and 1st place in exports of platinum ore
    • 3rd place in explored world copper and lead reserves
    • 3rd place in explored world wolframium and molybdenum reserves
    • 10% of world reserves of uranium (9th place)

In days gone by overseas property investors were being sold purely on holiday home investment opportunities. But the new breed of investor borne out of the crisis has been much keener on buy to let investments around the world, because they are willing and insist on doing the research neccesary to know that an investment is viable even after paying management and maintenance fees on a property you can't manage yourself.

Thanks to this new type of investor Russian property investment has been given the chance to make a name for itself on the international stage, because of the rental and capital growth opportunities in its vast and growing emerging economy.

Alternatively, a buy-to-let situation can provide reliable rental income from property, along with substantial capital appreciation in the medium to long term.

Our Russia Investment Research section allows you to investigate further into investment property in Russia and the location as a whole.

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