Cold War 21: Petro Dollars At Work In Russia

The world outside may be in the thralls of crisis, with house prices plunging, markets slumping and banks collapsing; but Russia's cocooned super-rich can still spare 2.5 billion roubles ($99 million) for a Moscow townhouse apartment within strolling distance of the Kremlin.

Spurred by petrodollars and booming consumer confidence, Moscow's real estate - where sky high prices can outpace Manhattan and London - has so far avoided following the local stockmarket's downward spiral, which continued Tuesday.

Property agency Agent 002 said last Friday an unnamed buyer had splashed out on the seven-storey 1,300 square meter apartment near the Kursk railway station.

"For Moscow, it's an absolute record," said Agent 002's spokesman Ruslan Barabash.
Barabash declined to identify the purchaser, but said he was an "active businessman" aged around 40 and not one of Russia's most well-known tycoons.

"It's a completely beautiful home. The design is in the 'high-tech' style," said Barabash.

The townhouse apartment, close to the Kremlin in the center of a sprawling city of 12 million people, has its own swimming pool, a children's floor and a winter garden on the roof.

NOT THE LIMIT

Although the average monthly income for Russians hovers at just below $700, a growing middle class support an active real estate market, with a smaller number of super-wealthy clustered around Moscow able to afford anything they want.

Outside some of the trendiest and most expensive restaurants in the city center and its most exclusive suburb, drivers of Bentley, Maybach and Rolls Royce automobiles can be seen idling the hours while their owners dine nearby.

"In the middle of August we observed a tendency of increasing sales for our most expensive apartments," said Barabash.

The prices are a far cry from Soviet times when Russians paid monthly rents of a handful of dollars, but lived often several families to a shared apartment or kommunalka.

Real estate analysts believe the current record could soon be broken, with demand strong at the top of the market.

"I think this is price of 2.5 billion roubles is not the limit for Moscow and in the near future there may be even more expensive sales," said property analyst Tatiana Makeeva. (source)