Russians’ interest in purchasing foreign real estate fell by 32–45%

After last year’s rush, Russians’ interest in buying property abroad decreased by 32–45%. In one of the key markets for compatriots, Turkey, the decrease reached 60-70%, and in the UAE – 25-30%. This is dictated by the implementation of existing growth, the weakening of the ruble and the flow of investment demand to alternative markets in the Middle East and Southeast Asia. Consultants do not see any prospects for growth in activity in 2024.

As calculated by Prian.ru, Russians’ demand for foreign real estate in 2023 decreased by 45% year on year. Analysts explain this by a cooling in demand after last year’s rush, when buyer activity increased manifold. Tranio says the number of requests has decreased by 32% this year. According to the company’s calculations, the median budget for Russians’ transactions with foreign real estate in 2023 amounted to €247 thousand, an increase year-on-year by 23.5%.

Prian.ru editor-in-chief Philip Berezin believes that an important reason for the decline in Russians’ demand for housing abroad is the weakening of the ruble, which is why the cost of such assets for them has doubled.

According to him, some buyers solved their problems last year, others were scared off by the negative background – “Russians are simply afraid that they are not welcome there.”

A noticeable decrease in demand from Russians in two key markets – the UAE (according to Tranio, forms 11.5% of requests) and Turkey (9.2%) had a negative effect on the entire market. The number of requests in these areas over the year decreased by 17% and 71%, respectively. Prian.ru says that interest in Turkey has decreased by 60% and in the UAE by 25–30%.

In the case of Turkey, new legislative initiatives had an impact, explains Tranio co-founder Mikhail Bulanov. In the country, the investment threshold for obtaining a residence permit has been increased from $50 thousand to $200 thousand, and from January 1, 2024, short-term rental housing will be possible only after obtaining a special license. Mr. Berezin notes that real estate in Turkey has risen in price over the past year, many transactions were concluded “in a panic.” According to him, the UAE has “washed out the speculative deals” that Russians entered into in the hope of reselling inexpensive housing. Managing partner of Exotic Property Svetlana Kasatkina calls overheated prices a problem in the UAE. According to Tranio, the median cost of purchasing real estate in the Emirates has already decreased by 27% year-on-year, to €209 thousand.

Managing partner of Intermark Global, Irina Mosheva, does not rule out that some Russians have reoriented from the UAE to other Middle Eastern destinations.

Tranio notes a 75% increase in interest in Qatar, and a threefold increase in interest in Oman and Saudi Arabia. But the countries are not yet among the most in demand. Mikhail Bulanov notes that potential investors may consider the Gulf countries as emerging markets. He cites Muscat as an example, where in some areas the cost of rent has increased by 10–15%. This year, interest in properties in Egypt has increased by 70%, adds Philip Berezin.

Investor buyers, according to Prian.ru estimates, formed 22% of the demand for foreign real estate this year. The shares of those who buy properties for moving or as a “distant summer cottage” decreased from 66% to 63% and from 17% to 15%, respectively. From the point of view of investment from Russians, according to Svetlana Kasatkina, Thailand was also attracted this year. According to Tranio calculations, demand for the destination increased by 32% year-on-year, but the median budget decreased by 8%, to €138 thousand. Anna Larina, director of the foreign real estate department of NF Group, calls interest in Bali high.

In European countries, a mainly negative trend continues.

Russian demand for real estate in Greece decreased by 17% over the year, in Spain – by 40%, in Montenegro – by 38%, in Italy – by 19%, Tranio calculated. There are few realtors in Europe who want to work with Russians, notes Tatyana Burlakovskaya, CEO of Golden Brown Group.

Philip Berezin expects that in 2024 the demand for foreign real estate will remain at the current year level. Mikhail Bulanov predicts stability in the UAE market, but does not rule out a slight cooling in the countries of Southeast Asia and a further decline in interest in Turkey. “We do not expect high demand from Russian buyers for real estate in fundamentally new countries,” he adds. Ms. Mosheva predicts that the surge in demand will end, which will balance the market.

Alexandra Mertsalova