Russia's real estate market attracts Chinese investors

A file photo of Chinese people taking a group photo in Moscow. [Photo: Chinanews.com]

With the rapid development of Chinese investment overseas, it's being suggested interest among investors is beginning to grow in Russia's real estate market.

Russia's real estate market is one of the first sectors of the Russian economy to show signs of recovery.

The volume of investment in Moscow's residential property market grew fast in 2016, reaching 4.2 billion U.S. dollars.

The average price in one of the city's high-rise buildings runs 3,500 U.S. dollars per square meter - much lower than the prices in many European capitals.

That bargain rate has got the attention of wealthy foreign investors, in particularly those from China.

Alexandra Sinilova from SAVILL'S international real estate company said the low value of the Russian Rouble against the U.S. dollar and Euro made Moscow an attractive prospect.

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

At Sparrow House, a luxurious residential project currently being completed, 10% of the units have already been snapped up by Chinese nationals.

"It was a unique deal here, because the Chinese people just came to the office and said 'we are looking for properties, and we are looking for five to six apartments,' and made the deal at once," said Sinilova.

Ekaterina Rumyantseva from real estate company, the Kalinka Group, expected that this trend would only grow.

"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 I know that part of the payments is being done in Roubles, so the Chinese businesses will need to put that money somewhere and the best way to do it is to invest in real estate," said Rumyantseva..

Industry experts say Chinese investors see significant growth potential in Russia's real estate market.

Analysts expect continued demand for Moscow's high-end residential properties, if global oil prices stabilize above 50 dollars a barrel in 2017.