The towering silver and glass building on the hill overlooking Moscow near the iconic Moscow State University has already become a landmark, but the last five floors of the building have remained exposed to the elements since its developer Don-Stroi ran out of money and suspended work in 2008. However, in the last month Russia's economy has started to pick up momentum again and the cranes on top of the building, which often disappears in the clouds, have started to move.

Like in most western countries, Russia's real estate sector was booming before the start of the global debt crisis. Prices soared and Russian developers and banks were investing billions of dollars.

"The crisis arrived at absolutely the worst possible time for the Russian real estate market," said Darrell Stanaford, Managing Director, CB Richard Ellis Russia. "In the spring of 2008 over a million square meters of new office space arrived on the market - the biggest ever addition to the city, so when prices began to fall they collapsed completely."

Today, the new supply of office space in Moscow is being steadily eaten up since despite the slower-than-expected growth, Russia's economy will still grow by at least 3.5 percent this year. Moreover Moscow Mayor Sergei Sobyanin has frozen all construction permits until a new strategy for the capital's development can be worked out; Stanaford says there will probably be no new office space coming onto the market until at least 2013. That will also push prices up.

Prices for prime locations have already passed their pre-bubble peaks. Office vacancy rates in Moscow have fallen to 12.5 percent from 25 percent at the end of 2009, and are only around 1 percent and 3 percemt in the prime retail and logistics sectors, respectively, according to Renaissance Capital.

A similar story is playing out in the residential market. Moribund for last two years, the residential sector is now recovering quickly. The volume of new construction accelerated unexpectedly in July, rising by 17.6 percent year-on-year, according to analysts with Alfa Bank. The uptick was primarily driven by new residential housing coming on the market and companies restarting work on half-finished buildings. Dozens of projects were frozen in 2008-2009 as heavily indebted developers struggled to survive after their credits were cut off completely in the worst of the meltdown.

The prospects for more growth are good. Banks have reported an increase in mortgages all year as Russians are once again investing their spare cash in bricks and mortar.

"We noticed ... a sales increase in August. It's both direct sales of new homes and mortgage deals," said Pavel Kocheryozhkin, deputy chief executive of YIT Moskovia, a subsidiary of Finnish developer YIT.

At the same time Russia's Mortgage Agency (AIZhK ) said in August that the number of mortgage and housing loans will nearly triple to 741,000 loans by 2015 from the current 300,000 and continue climbing to 868,000 by 2020.

While many American and European mortgage holders are still under water, prices for residential property in Moscow have held up well; as the market is so small the owners of the better apartments simply took them off the market during the crisis, prepared to wait until the crisis was past.

The average price of Moscow residential real estate has soared from around $900 per square meter in 2003 when mortgages first became available, to $4,000 per square meter in January 2010 to reach $5,000 in June 2011, according to the website Irn.ru.

The recovery of the sector in general is also attracting money: Investment into real estate has already nearly recovered all the ground lost and after 52 percent growth year-on-year in 2010, investment will increase another 30 percent this year, say analysts with Renaissance Capital, to take the absolute levels past its pre-crisis peak.

Is another bubble forming? The big difference between Russia and America is that unlike America there is a huge shortfall of supply in Russia. In order to meet the pent up demand the size of Moscow would have to double, says Roland Nash, chief strategist at Verno Capital. And in August, Mayor Sobyanin announced plans to do exactly this.