Against a background of global uncertainty and sanctions, high-end Russian real estate is witnessing a dramatic surge. In a lack of overseas destinations in which to invest its money, Russia’s upper echelons are investing its resources in domestic high-end properties. Not merely does it stabilize Moscow housing, it also changes investment trends in high-end across Russia.

Why Are Wealthy Russians Investing in Moscow Real Estate?

Russian cash poured into global hotspots in cities like London, Dubai, and New York over a series of years. But global sanctions have placed a limit on their ability to transfer money overseas, making overseas purchasing more difficult. Domestic housing is a more attractive alternative.

High interest rates as well as rising inflation have also promoted this trend. The Russian central bank’s aggressive rate hikes in a bid to keep a leash on rising prices have prompted many towards holding on to tangible assets that can preserve value. Prime location properties in Moscow are a preferred hedge in a volatile economy.

“The safest place in which money can be held these days is in Russia,” says a founder of a real estate ecosystem. This sentiment aligns with a broader opinion from investors that local housing is a secure and growing asset.

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Luxury market outpaces global equivalents

While major cities like London and Hong Kong struggle with a slowdown in high-end real estate, Moscow is experiencing an upturn. Sales of luxury apartments priced at over 1.95 million rubles ($19,813) per square meter increased nearly 40% last year, with prices climbing 21%. This price growth places Moscow on par with major European markets such as Paris and London.

Demand is seen in rapid growth in high-end housing developments. One notable project, a renovated Art Nouveau palace in central Moscow, is a prime example of new high-end housing in the city. The small apartment complex with just two dozen units saw some of its highest sales in a single apartment last year that sold for 3.8 billion rubles ($38.1 million).

Another standout project is a luxury villa development in the high-end suburb of Zhukovka. The minimalist design, with its floor-to-ceiling windows and lavish surroundings, ranges from $25 million to $45 million, with five units having already sold. The project is crafted by a Russian architecture firm that also worked on the Manhattan skyscraper at 262 Fifth Avenue known as the “skinny skyscraper.” The development is a demonstration of Moscow’s growing appetite for high-end, globally competitive homes.

Who is buying?

Tracking buyers’ identity is not easy, although some data is known from those in the sector. The majority are between 40–50 years old and are from manufacturing, IT, entertainment, and sporting sectors. Given volatility in the ruble as well as interest rates at 21%, these are looking towards real estate as a more secure means of investing as compared with that in finance.

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How Moscow Compares to Global Luxury Markets

Moscow is bucking global trends in its housing market. In the past, high-end Russian buyers have bought homes in London, earning that British capital its nickname as a “Londongrad.” But high-end housing in London is stagnant, with forecasts that prices will decline. And though in 2022 a prime destination for Russian buyers, Dubai is no longer in that position, having dropped from 2022’s No.1 position down to 9th in 2024, as noted by real estate agent Betterhomes.

While Russian interest in foreign real estate hasn’t faded away, it is shifting towards Southeast Asia. Thailand and Bali are preferred destinations for Russian buyers, although at a smaller scale from before. Russian interest in overseas property in general dropped 24% in 2024 from 2023, as a more domestic preference.

Future developments: Will the Boom be ongoing?

While a continuing housing boom in high-end housing is a healthy development, challenges are looming on the horizon. Increased construction costs and high interest rates have a tendency to hinder new construction. Developers are waiting in hopes that more stable market conditions will prevail before new projects are begun.

Yet high-end housing is not in high demand in Moscow alone. The Russian resort town on the Black Sea at Sochi is another location that is becoming more popular with high-end buyers. Such developments as Mantera Seaview Residence, which is spread across six hectares with high-end facilities, are a testament to growing interest in high-end developments away from the national capital.

Conclusion 

Moscow high-end housing is experiencing a strange boost, which is propelled by sanctions, a fear of rising inflation, as well as a limit on overseas investing. The Russian high net worth individuals are looking towards domestic property as a result, with sales as well as prices making new highs. Despite high interest rates as well as overall uncertainty in the economy, high-end housing in Moscow is likely to be a persistent trend that will determine urban housing in the near future.

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