Even by the grisly standards of regular Russian score-settling, the murder earlier this month of a former Moscow region property registry official was bold in its execution. The remote-controlled bomb placed under Valery Yakovlev’s Lexus 4x4 was set off in the middle of the day and had the explosive power of 2lb of TNT.

If the investigators’ early suspicions about the killing prove correct and it turns out that Yakovlev was, indeed, singled out for retribution over his investigation into land right deals, it could mean the stakes for valuable real estate in Russia have been raised a notch higher.

Mention Russians and property in the same breath these days and most people will immediately think of Roman Abramovich and other oligarchs who have been merrily buying up some of the plushest properties in London over the past few years — helping to fuel the British property boom in the process. But what has been going on in their own capital is if anything even more dramatic.

According to IRN, a market research company, the price of the average flat in Moscow has doubled over the past year to more than £2,000 per square metre. Those in the best districts can easily reach £10,000 per sq metre.

“The market has gone through six years of sustained growth, literally doubling every year,” says Mark Hamilford, senior partner at Intermark, a Moscow-based estate agency that joined forces with Savills last October. “Tastes are changing. A new generation of young Russians, who were educated in Russia and worked abroad for international banks, are now moving back to join oligarch-run banks, and investing in the market.”

So where does the well-heeled Russian buy at home? The district of Moscow known as the Golden Mile, a set of well-preserved historical areas 10 minutes from the Kremlin, remains a favoured nesting ground for the super- wealthy. Also popular are flats in the elegant pre-revolutionary buildings of Ostozhenka in southwest Moscow and the leafy Patriarch’s Ponds, setting for Mikhail Bulgakov’s classic The Master and Margarita.

The city nevertheless still lacks a recognisable equivalent to Mayfair or Belgravia — the two London districts beloved of affluent Russians.

“It took centuries for these kinds of areas to take form in Europe, so it is not really possible for them to crop up in Moscow so soon,” says Kaido Kaarma, director of the elite residential department of Miel, a Moscow estate agency. “We just don’t have the same kind of history as an upscale district in somewhere like London.”

Indeed, the suburbs are where the real action is. The rich settle in gated communities such as Pokrovsky Hills in northwest Moscow, which often have their own shops, parks, security forces and even hospitals. To a Western eye, such developments are often uninspiring, but they do guarantee security and service — both of which are in short supply elsewhere in the city.

Inevitably, in a country like Russia, where people always trust bricks and mortar over even the most reliable bank, opportunities abound for shady operators to seize their moment.

A favoured technique among such unscrupulous characters is selling non-existent homes to inexperienced buyers desperate to get their hands on some property. Some of those stung are investors, but others have risked the proceeds from the sale of their own home — and are often left penniless and with no form of legal redress.

The rising cost of housing in Moscow has become a subject of daily discussion in the city. Even President Vladimir Putin weighed in on the matter at a recent government meeting when he spoke at length on how property is now out of reach of the average Russian’s pocket. “Let us be frank — as ever, property is far from affordable to everybody,” he said.

The Russian government has responded with an ambitious national project to provide more affordable living spaces for its impoverished population. As part of the scheme, entire cities will be created from scratch, such as one envisaged by Limitless, a Dubai-based developer. It has a £5.5bn project to build a new town on 44,000 acres outside Moscow with 150,000 residential units in phase one alone. Russian developers are becoming involved in similar projects elsewhere in the country.

How long the boom can continue is a matter of contention; memories are still fresh of the economic crash of 1997-98 that led to prices collapsing. Indeed, there are some indications that certain segments of the market may finally be levelling off.

“It is difficult to know which way prices will go in the future,” says Katya Budko, a representative of Beatrix, a Moscow estate agency. “The economic situation in our country is not all that firm.”

Roustam Tariko, a flamboyant vodka-and-banking billionaire, is even more cautious. Although he has made his fortune lending money to Russians to buy cars, fridges or televisions, Tariko announced recently he wouldn’t touch the mortgage market, because of fears of a speculative bubble. “I believe a crisis will come soon,” he warned. “Real estate prices are very inflated.”

On the market

A 360sq m flat in a pre-revolutionary building, with a concierge, is for sale for £2.7m with IntermarkSavills, 020 7730 0822, www.intermark.ru .

In the city centre, this three-bedroom flat in a historic mansion is for sale with IntermarkSavills for £3.6m, 020 7730 0822, www.intermark.ru .

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