Russia: Housing comes out of the red

Perhaps our most famous football export is multi-billionaire Roman Abramovich, who came to the medias attention in June 2003 when he bought Chelsea football club. Chelsea has since won the Premiership twice in a row. Our national team has not had as much success.

Its best World Cup performance was in 1966 when it reached the semi-finals. Russia failed to qualify for the upcoming World Cup, but at least the countrys housing market is performing positively.

Our capital, Moscow, is dynamic and diverse and at the heart of Russias international connections which means property prices can be high. With Russias oil-fuelled economy and an unprecedented growth in consumer spending, demand for properties to buy and rent is strong.

The Moscow property market has a short history. In Soviet times all properties were state owned with apartments distributed according to peoples places of work. Options to exchange after a property had been allocated were limited.

The modern real estate market began in 1990 when Muscovites got the opportunity to buy and sell property for the first time.
In central Moscow, prices have trebled since 2002, although growth in 2005 was slower than in previous years. Prices range from $80,000 for a one-bedroom apartment on the edge of town to more than $400,000 for a two-bedroom flat in the centre.

The average price for real estate in Moscow is about 1,700 per square metre. Property buyers pay no Stamp Duty but have to pay a fee to register their ownership.

Among the beautiful buildings in Russias second city St Petersburg are formerly state-owned palaces now available to buy. The citys longstanding connections with the West make it quite cosmopolitan so property prices are high.

Mortgages were only introduced in Russia eight years ago with the arrival of legislation on the subject. As most Russians own 100% of the equity in their properties, getting easier access to mortgage credit is likely to fuel further price increases and the local property market is expected to perform well in the coming years.

With growth set to continue, we live in hope that our national team will put in equally positive performances on the pitch as we look to our next World Cup campaign.

Mikhail Loskutov is communication leader at GE Consumer Finance (Russia)