At the moment Russian real estate market still very young since began to form only in the early 90s of the 20th century. Until 1991, all buildings and land was owned by the government of the Soviet Union. From November 1991, mass privatization began and began the mass transfer of Soviet property into private property, began the transition from socialism to capitalism. We can confidently say that this process has not ended yet because at the moment only 80% of residential property is privatized, only 34% of agricultural land has been privately owned, only 2.5% of settlements land and 1.7% of industrial land purchased from the government. Largely due to this, real estate prices in many regions of Russia remain among the lowest in the world. The Russian real estate market was opened for the world quite recently and this attracts many investors and property buyers from around the world. But many foreign investors face the problem of lack of information about the Russian real estate market. We will try to solve this problem and provide more up-to-date and reliable information about this.
Historically, Russia always had the largest reserves of agricultural land in the world. In the days of Tsarist Russia, peasants with heavy labor, hectare by hectare, step by step cultivated land, uprooted trees, cleaned, plowed. Land always fed people. In Soviet times, people also worked hard on the land, cultivated huge new territories. Most of the agricultural land of Siberia and Far East were cultivated during of Soviet times. Were made roads, reclamation and drainage systems, held electric power lines. All this inheritance is used and improved by farmers in our time. Currently, Russia has 384 million hectares of agricultural land and only 129 million hectares are privately owned. Nevertheless, many agricultural land already ready for work remain empty, not many people want to engage in agricultural business, preferring to live in big cities and do another business. Russian government understands that agriculture is a very important sector of the economy and therefore offers to take on long-term lease or buy land is not expensive. In Russia, it is possible to buy agricultural land from private owner or from the government or village administration. The most favorable prices for agricultural land in Siberia and the Far East of Russia. Sometimes, in some remote areas the price starts from $ 20 per hectare. The price is very dependent on location, proximity to infrastructure, roads and cites, conditions of the land, but at the eastern part of Russia does not exceed $ 2000 per hectare. This can be explained by not high population density and not high competition in this market.
The residential real estate market in Russia is very extensive and different. Prices directly depend on the region, year of construction, remoteness of property from large cities and infrastructure. About 60% of apartment residential buildings in Russia was built in Soviet times. In Stalin’s time (1925-1953), builders built large spacious apartments with thick walls and high ceilings 3.2 meters; these apartments still remain among the most expensive in the market, because the quality is very high and the sizes are very large. From 1955 to 1985 built apartment buildings developed under Khrushchev. At the moment, these are the cheapest apartments, because the size of the rooms is not big, the ceilings are 2.5 meters, as a rule no elevator and garbage chute.
About 35% of apartment buildings in the Russian real estate market were built from 2000 to our days. These are modern, good-quality apartments with elevators, ventilation, security systems, parking spaces, garbage chute, separate bathroom / WC and good sized rooms.
The most expensive residential real estate is traditionally in Moscow and St. Petersburg. Moscow is the political and economic capital of Russia, St. Petersburg is the cultural capital of Russia. Too many people prefer to live in these cities, the population density in these cities is very high and as a result the price of residential property at this part of Russian real estate market is very expensive. On Sakhalin Island and in the northern regions of Russia, the price of real estate is also expensive, this is due to the difficulty of delivering building materials and the complexity of construction in these hard-to-reach regions of Russia.
In other regions, prices are very attractive and the cost per square meter of housing is much lower than in some other countries. On average, the price of new apartments and houses located in cities and suburbs is ₽ 30,000 – ₽ 40,000 rubles ($ 450 – $ 600) per square meter. This price already includes a good repair, heating, water supply and sewerage. The price of houses with land in villages is much cheaper and starts from ₽ 10 000 rubles ( $ 150) per square meter of house. In this price also includes the plot of farm land ranging in size from 2,000 to 10,000 square meters. Of course, this is not a big size, but this land is enough to fully provide one family with vegetables and berries for 1 year. Recently, more and more people get tired of big cities and choose quiet village life. All villages have all the necessary infrastructure for life. There are schools, kindergartens, hospitals, shops, electricity, cellular communications and interent.
If after reading this post you still have questions about the Russian real estate market, please feel free to contact us and ask all your questions.