Can you believe that Moscow now has the world’s most expensive real estate? Georgists can challenge themselves to read between the lines:
The article provides a prompt on how oil rents have been capitalised into higher land prices.
Russia’s foreign investment laws strongly limit investments in the energy sector. However such limitations on non-agricultural land are absent. Thus local and international speculators have made a calculated assessment, based on sound economic laws, that oil rents will flow through the economy and into higher rents. ie higher city land prices.
The article then goes on to tie a link between Moscow’s dizzying real estate prices and those of Japan in the late 80’s. If the article had taken the analysis to its rational conclusion we would have read: ‘If the economic rent was collected as public revenue then such asset price bubbles would never have occurred.’