Chinese investors help revive Russian real estate

Global Business

Chinese investors help revive Russian real estate

Chinese investors are snapping up properties in Russia’s capital Moscow at an increasing rate.

According to Russian analysts, the amount of Chinese buyers in some parts of the real estate market has roughly tripled over the past two years.

Reports also suggest that many of these properties are in high-end skyscrapers and are being used as investments rather than primary homes.

CGTN’s Moscow correspondent Daria Bondarchuk looks at how Chinese investments are contributing to Moscow’s real estate market revival.

Chinese investors help revive Russian real estate

Chinese investors help revive Russian real estate

Chinese investors are snapping up properties in Russia's capital Moscow at an increasing rate. According to Russian analysts, the amount of Chinese buyers in some parts of the real estate market has roughly tripled over the past two years. Reports also suggest that many of these properties are in high-end skyscrapers and are being used as investments rather than primary homes. CGTN’s Moscow correspondent Daria Bondarchuk looks at how Chinese investments are contributing to Moscow's real estate market revival.

The real estate market is one of the first sectors of the Russian economy to show signs of growth after two years of recession.

Last year, the volume of investment in Russia’s property market, reached $4.2 billion.

Luxury properties appear to be attracting more foreign buyers, even though the rouble is trading around 40 percent higher than it did a year ago.

Sixty percent of the units in this development project in central Moscow, the Sparrow House, have already been sold. Real estate firms say around 10 percent were snapped up by Chinese buyers.

“It was a unique deal here, because the Chinese people came to the office, and said we ‘are looking for properties, we are looking for 5-6 apartments’ and made the deal at once,” said Alexandra Sinilova, Head of Consulting Savills.

Some Russian real estate experts say they’re seeing a boom in Chinese investors buying Russian properties.

“Right now all the prices are fixed in roubles and this market became very interesting and attractive for European investors and also for Chinese investors. Because Moscow is closer to China, the climate is more suitable for the Chinese people,” continued Sinilova.

With Moscow’s residential property prices being attractively low compared to those in London or elsewhere in Europe, industry experts expect more Chinese investors to come to the Russian real estate market.

“I think the trend will be growing, as relations between Russia and China are strengthening, and bilateral trade turnover is expected to triple in the next couple of years, so many Chinese will be coming here to service that trade turnover. And, as far as I know, part of the payments is being performed in roubles, so the Chinese businesses will need to store that money somewhere, and the best way to do it is to invest in real estate,” said Ekaterina Rumyantseva, a representative of the Kalinka Group.

Industry experts say there is significant growth potential in Russia’s real estate market, especially in the luxury sector.

If global oil prices stabilize above $50 a barrel, analysts expect a continued demand for Moscow’s high-end residential properties.