Russia » Market Report

Whether or not to buy a house is not necessarily a question of location, but of lifestyle. The standard house is known as a “1-floor house”, and could be in the city centre or the suburbs. They stand behind tall walls on leafy streets, and generally have four or so rooms on a single floor, with a basement below and an attic above. They are warm in winter and cold in summer, but the real advantage is the garden.

People also own a second home in Russia. Maintenance and running costs are minimal. The market for property, as for everything, is buoyant and foreigners don’t face restrictions. House prices have risen by about 50% in two years, and there is an enormous range and volume of houses for sale.

Primary industries in Moscow include the chemical, metallurgy, food, textile, furniture, and machinery industries.

As of 2006, there are 8.47 million Muscovites able to work. 1.73 million are employed by state, 4.42 million are employed by private companies, and 1.99 million are employed by small businesses. There are 74,400 officially registered unemployed working age adults, of which 34,400 are eligible for unemployment benefits.

There are 1696 high schools in Moscow, as well as 91 colleges. Besides these, there are 222 institutions offering higher education in Moscow, including 60 state universities and the Lomonosov Moscow State University, which was founded in 1755.

In Moscow prices for the types of apartments and houses bought by foreigners range from around US$150,000 to US$500,000. Properties can be rented out for a return of around 9-11%, plus capital growth.

The most heated discussions are now over newly constructed buildings. As late as last fall, representatives of the Moscow construction sector were authoritatively claiming that there were no available plots left within the city limits for building large projects. The last of these had been developed in Kurkino and Molzhaninovo. A sharp rise in prices for single-unit plots ensued. Prices in new buildings spiraled upwards, almost rivaling those of the secondary market, which reverted many potential buyers to older flats.

The rental market has increased in current years as many foreigners, moved out of regulated rental apartments and into market priced rental accommodation due to the fact that these were often considerably better located and were far more comfortable.

Investing in new buildings in the Moscow suburbs remains about the only budget solution for lower-end shoppers on the primary market. Like elsewhere, sale prices are proportional to the building's degree of readiness. For example, an apartment with improved planning in a comfortable 16-story brick building to be completed in the fourth quarter of 2004 in the Oktyabrsky village in the Lyuberetsky District can start at a mere $380 per square meter. The greatest demand was for one-room apartments, partly because such properties are indispensable for various exchanges and for the resettlement of communal apartments.

The market for the Moscow Region is considered to be very promising, as prices there are lower, while the transportation problem has been solved in most areas. Besides, the environmental conditions in the suburbs of Moscow are much healthier than in the city proper. For these reasons, many immigrants from other regions and neighboring countries prefer to acquire housing in the suburbs first, and after saving money for some time, move into the capital city.

International Property Brokers forecast that the real GDP of the Russia will remain 3.9% in 2009. But the economy will not show any further positive sign due to import in a large scale and very small exports in a global perspective. We see a recovery in the industrial sector of the Russian market. Russia is a bigger country on the base of area it has. Many foreign investing is coming in the country. International Property Brokers also forecast that there will be great demand in property in the near future and rental rates are going to be increased.