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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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Even if it's not the only market in Russia, Moscow is by far the most important one in terms of volume and value, representing more than half of the national business. The capital can influence the national market, but this doesn't mean that all the other regional markets have automatically followed these recent positive trends. A brief look at the other Russian markets show that some cities indeed have demonstrated remarkable results (e.g. Saint-Petersburg). Other cities did little to reverse the negative trends after the financial crisis of 1998, and finally another group still experiences property devaluation. Moscow isn't the city with the most radical property appreciation in terms of percentage gains, but given the dominant position of the capital city the market there is much more interesting for the prospective investors.

The recent positive trends in Moscow have shown remarkable correlation between the price increases and another market we all feel whenever in the world we live, namely the oil. Some Russian specialists even have calculated that every dollar a barrel above a certain level contributes to a certain percentage increase on the property market in Moscow. The neutral point is reached when the oil is traded around the point of $18 a barrel. When we have $20-21 a barrel, we can anticipate a price increase of 1% per month. At $26-27 a barrel we can already expect a 2% monthly increase. Thus we may conclude that at some point above $30 a barrel the monthly increase can reach 3%. So given the fact that the oil was traded around $25 during the last 12 months (with some considerable fluctuations around this mark due to the war in Iraq), it's not surprising that the market in Moscow, where 30% of the demand comes from the petrodollars has went up by 30%.

Last year we mentioned the poll among the population of Moscow showing preference for buying real estate. Then it was considered to be among the safest and most attractive investments. Given the continuing and even increasing dependence of Russia on oil and other raw materials export we can safely conclude that the future of the Moscow real estate market lies on the oil futures traded around the globe. As far are the oil forecasts are concerned, the oil in the next 12 months will be traded somewhere between $25-28 a barrel, which doesn't exclude sudden temporary changes due to some exceptional circumstances (wars, economic crises, terrorist activities). Thus if the Moscow real estate market continues to show the same correlation with the oil prices, and with all other things equal (Russian government is famous for its unpredictability), we can expect again 25-30% increase of the property prices in the Russian capital.

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