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Russia: Investment Potential 2008

The Russian property market is proving increasingly attractive and property investors are setting their sights on Russia as the next emerging property market. Since 1999, Russia has experienced the fastest period of growth in its history, which has opened up a wealth of new markets and opportunities for local and foreign property investors in Russia.

Russia's Booming Economy

Prospective property investors in Russia are showing interest in its rapidly growing economy. There is an increasing demand for commodities produced by Russia such as metals, natural gas and oil, and this demand is stimulating economic growth. According to the Telegraph, the explosion in global energy prices means that Russia has been able to increase its foreign reserves by an unprecedented amount and much of this income is going into real estate.

Growing Tourism

Good news for investors in Russia is the vast amount of money being poured into infrastructure improvements for the Krasnador territory, which includes Sochi, the destination for the 2014 Winter Olympics. Known as the Russian Riviera, it has a coastline that stretches for around 1,000 kilometres between the Azov and Black Seas and according to Russia Profile.org, tourism here is increasing at around 20% per year. $12 billion will be invested in the area to build a world-class winter sports complex, including housing, hotels and transport links.

Russia's Property Boom

Investors in Russia are looking to Moscow and St. Petersburg, which are both enjoying a property boom. Knight Frank highlights price rises of more than 30% in prime areas during 2007 and predicts between 18% and 25% for 2008. They say that "Moscow has the potential for more growth and will rival London as the most expensive world city within 5 years." With amazing price growth in Moscow and St. Petersburg and booming property prices in Sochi in anticipation of the 2014 Winter Olympics, Russia's property investment potential is clear.