(MARIUPOL) – A lucrative property market has emerged in the occupied Ukrainian city of Mariupol, with billions of roubles in Russian state financing creating vast profits for developers and members of the political elite. This construction boom is transforming the city that was largely reduced to ruins during a siege in 2022, while thousands of displaced Ukrainians are left with little hope of compensation or return.
An investigation has found that Russian state banks have allocated more than 61 billion roubles (approximately $727 million or £572 million) in financing for new residential projects in the city. A free economic zone established across the occupied territories offers businesses reduced taxes and other incentives, making construction a highly profitable venture.
The average price for property in Mariupol has reportedly reached €2,150 (approximately £1,840) per square metre, an increase of more than 200 percent. Companies linked to major Russian businessmen, including the business network of oligarch Vladimir Yevtushenkov, are among those involved in the reconstruction. Another developer was founded by State Duma deputy Sergey Kolonov and is now run by his son.
The human cost of this reconstruction is stark. Thousands of Ukrainians fled Mariupol in 2022. Human rights groups report that occupation authorities have subsequently classified homes as ownerless, sometimes even when the owner’s identity is known. Confiscated apartments have been transferred to new residents.
Russian authorities are actively encouraging Russians to relocate to the city through promotional campaigns and heavily subsidised mortgages, with rates reportedly as low as 2 percent. This creates a striking contrast: while Russian buyers are offered cheap loans to purchase new apartments, some former residents are still struggling to recover homes they owned before the full-scale invasion.
The destruction of Mariupol was one of the earliest and most destructive episodes of the Russian invasion of Ukraine. Human Rights Watch found that 93 percent of high-rise apartment buildings examined in central Mariupol were damaged, alongside all 19 hospital campuses and 86 of 89 schools and universities. An attack on the city’s drama theatre on 16th March 2022, where hundreds of civilians were sheltering, was described by Amnesty International as a clear war crime, concluding that Russian aircraft most likely dropped two 500kg bombs on the building.
The scale of construction across occupied Ukraine is considerable, supported by state banks, subsidised mortgages and cheap land. For construction companies, these incentives create opportunities that are increasingly difficult to find in Russia’s own struggling property market. New apartments in Mariupol are being bought by Russian newcomers, often state employees, military personnel and members of the security services.
Corruption investigator and activist Ilia Shumanov said the reconstruction is a “business card for Putin’s regime” designed to present a facade of renovation in the occupied territories. He noted that a lack of responsibility from Russian authorities allows federal money to be disseminated through construction companies belonging to people directly connected to the Kremlin.
Shumanov explained that the policy is leading to demographic replacement. “The owners of this property in Mariupol, they’re trying to leave their places and to return back to the other side of the border to Ukraine,” he said, describing a movement of people from Russia to Mariupol and from Mariupol to Ukraine or Europe.
He noted that buyers are often connected to the state, such as military personnel or members of security forces, for whom the subsidised mortgage is a key incentive. He also suggested that construction companies may be building and owning property to resell on the secondary market. “It’s actually the building property on the graveyard,” Shumanov said, describing the moral dilemma of building a new life on a battlefield. “If you have no possibility to buy any property in other places of Russia, some of the people [are] forced to buy some property.”
When asked about international action, Shumanov said monitoring the beneficiaries of the construction process is important. He noted that while some individuals involved, such as oligarch Vladimir Yevtushenkov, have been sanctioned by the European Union, others have not. He suggested that targeting these profiteers could be a point for future sanctions packages.
Comparing the situation to Crimea, Shumanov noted that the scale of devastation in Mariupol is far greater, as there was no major military action in Crimea. He added that while other occupied regions like Berdiansk are close to the battlefield, Mariupol is a key showcase for the Kremlin to project an image of peaceful life, despite ongoing military actions and reports of disappearances and corruption nearby.
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