In January-March 2024, Russians’ demand for foreign real estate decreased by 50% year-on-year

The weakening of the ruble and difficulties with withdrawing funds abroad were one of the reasons for the reduction in the first quarter of 2024 to 50% of the interest of Russians in purchasing real estate abroad. This is clearly visible in the Turkish market, where the volume of transactions involving Russians has decreased almost threefold. There is also a cooling in the UAE real estate market.

In January-March 2024, Russians’ demand for foreign real estate decreased by 50% year-on-year, according to Prian.ru. Barnes International Moscow talks about a 20% year-on-year decline. Analysts at Golden Brown Group and Nevestate record a negative trend, but they do not provide specific figures. Denis Perkovsky, head of the foreign real estate department at Barnes International Moscow, considers rising real estate prices in emerging markets, the weakening of the ruble and currency restrictions to be the main deterrent factors for buyers.

At the beginning of 2023, the dollar and euro cost 70–75 rubles, now they are almost a third more expensive, notes Prian.ru editor-in-chief Philip Berezin. The expert also recalls that the beginning of 2023 “was abnormal”: “The shock from the announcement of partial mobilization had not yet passed; against this background, many were considering options for purchasing assets abroad.” By the end of last year, this trend gave way to a sharp decline.

An important factor in the overall decline in sales was the collapse in demand for Turkey, which, according to Prian.ru, has remained the leader in terms of transaction volume for the last few years. According to the local statistics institute, in January-February 2024, Russians purchased 950 properties in Turkey – almost three times less than a year earlier (2.7 thousand). Philip Berezin says that at the beginning of 2023 the country generated a third of requests, now it is about a quarter. “Earthquakes have occurred in Turkey over the past year, the investment threshold for obtaining a residence permit has been raised, and a law has been adopted that makes it more difficult to obtain income from short-term rentals,” he lists.

Tranio Development Product Director Elena Milishenkova sees a cooling in the second market popular among Russians – the UAE, where applications have decreased by 25.8%. “But at the same time, fellow citizens switched to the markets of neighboring Gulf countries – Oman, Qatar, Saudi Arabia,” she argues. Dayana Berezovskaya, head of international real estate at Golden Brown Group, draws attention to the fact that transactions by Russians in the UAE in 2022–2023 were mainly investment ones.

Nowadays, according to her, people often buy real estate for themselves. At the same time, demand for real estate in Thailand in the first quarter of 2024, according to Elena Milishenkova, almost doubled year on year. Now this country accounts for 17.8% of all applications for the purchase of foreign real estate by Russians, she adds and connects the trend with the constant increase in tourist flow to the country. “Many buyers expect to receive income from renting in the future,” explains Ms. Milishenkova. Mr. Berezin believes that investors form about 80% of transactions not only in Thailand, but also in other countries in Southeast Asia, including Indonesia and Vietnam. With reasonable risks, you can earn 8–10%, and in some cases, 15% per annum, he believes.

Analysts interviewed by Kommersant call demand on European routes stable. Philip Berezin says that taking into account the general reduction in the number of transactions, their share over the year has increased from 15–20% to 35–45% of the total volume. These calculations include not only the EU, but also other traditionally popular countries among Russians – Montenegro, Georgia, Albania and Serbia. Tranio says that European countries as a whole took up 55% of total demand in the first quarter, the EU – more than 40%.

Analysts see an increase in interest in Greece, linking it with the upcoming tightening of conditions under the “golden visa” program: in the fall, the minimum cost of real estate purchased under it will increase from €250 thousand to €400 thousand in the country as a whole and €800 thousand in Athens. Although Philip Berezin warns that only holders of several passports can participate in the program. It is not available for holders of only Russian ones.

Ms. Milishenkova notes a 55% increase in interest in Hungary due to the relaunch of the program for obtaining an investment residence permit. Anna Larina, director of the foreign real estate department at NF Group, says that Cyprus, Spain and France continued to generate significant demand in the first quarter. Prian.ru notes that the share of investment transactions by Russians in European markets has increased from 20% to 25%. According to Philip Berezin, Russians continue to view foreign real estate as a relatively accessible asset for earning income abroad in dollars or euros.

Alexandra Mertsalova