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Selling to Russians News: The Major Goal of Buying International Real Estate for the Russians
January 04, 2017
The demand for properties abroad is growing again, but the Russians are not going to use them for their own family needs. They are investors now.
In 2016 about 70 % of all purchases that the Russians made in various countries around the world were investments rather than vacation properties - that's what "Rossiyaskaya Gazeta" states in its latest article in December.
According to the Central Bank of Russia data, the volume of real estate international purchases that went through the Bank in the third quarter of 2016 grew 19% in comparison with 2015, and 29% over the crisis year of 2009, but was still only 34% of the pick year of 2013. (There are other transactions, too, as Russian companies and persons have their money in foreign banks, and no stats available for those transactions of course.)
The journalist interviewed several Russian realtors for the article, and they say that the international real estate market shows some improvement in 2016: There are not only more requests from the Russian buyers, but also more completed purchases - the growth is from 15 % to 20%, as the realtors estimate. At the same time they notice that an average purchase price is down about 1.5 times.
Cyprus is in demand. The country has lowered the required amount of a property price purchased by a foreigner to 2 mln Euro to get citizenship, and it makes Cyprus even more attractive for the foreign investors.
As always, the Russians buy in London, South of France, Italy and Spain. Lately a sharp interest in the U.S. real estate has happened, especially in New York and Miami. It's definitely influenced by the new U.S. President-elect.
(A note: According to various sources, the U.S. was in the top 5 countries of interest by the Russian buyers before the sanctions, but after the sanctions it's not even in the top 10…)
The Russian buyers' demand for real estate abroad has moved towards income-producing residential and commercial properties.
In the past, before the sanctions against Russia, when the Russian ruble was standing much higher, anybody could sell a home in Russia that he inherited from his late grandmother and buy a vacation property abroad, but not anymore… Only Russian people who have money, can buy real estate internationally, and they know that money should make money… Buying properties for themselves was the goal of 30% of the Russian buyers in 2016.
Such income producing commercial properties as hotels and apartment buildings are being requested by the Russian investors in international real estate.
The interviewed for the article realtors are cautious about making predictions for the future. It depends on the economic and political situation - hopefully the markets will be improving along with the relations between Russia and the countries of interest improving, they say. Although the budgets of international purchases of the Russian real estate buyers will not go up to the previous figures anytime soon as the ruble costs less compared to the Euro and American dollar.
To your best business success,
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