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Russians invest in homes in warmer climates

November 07, 2013, 11:58 UTC+3
Russian citizens have an intense interest in foreign real property
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The Central Bank of Russia (CBR) has found that Russian citizens have an intense interest in foreign real property, the Novye Izvestia newspaper writes.

The number of transactions to purchase foreign real estate in the second quarter of the current year increased by 12%, compared to the same period last year. The CBR reported this week that the number of transactions in the specified period reached $526 million. In the period from April to June 2013, the share of transactions with foreign real property reached 6% of the total volume of remittances from Russia. Experts of the Central Bank say that the growth in Russian citizens’ prosperity is the main reason for this. However, independent experts point to another reason: buying property in Europe or the United States, people are simply trying to keep their savings.

According to the Central Bank’s analytical materials, the volume of cross-border real estate transactions has been steadily growing since 2009. And if 4 years ago, the volume of Russian investments in foreign immovable property stood at $223 million, then over the past year, for example, Russians bought housing abroad worth nearly $1.9 billion. In the first quarter of the current year, Russian citizens have spent on buying real estate abroad $414 million. If the process keeps going at this pace, the CBR experts predict that by the end of 2013 the volume of Russians’ investments in foreign realty would exceed $2 billion.

The sector’s experts working on foreign realty markets say that more than 80% of Russians, buying real estate, purchase houses and apartments at resorts. The rest of the buyers purchase housing in large cities of Europe and the United States. The most popular countries with them are Spain and Italy. In the inexpensive Bulgaria, for example, it is possible to buy an apartment at the stage of foundation pit for 10-12 thousand euro (about 500 thousand roubles).

Director of the Institute of Globalisation Problems Mikhail Delyagin told the Novye Izvestia daily that “both law-abiding citizens and criminals, including those holding public office are leaving Russia.” Back at the end of last year, realtors found that every third house on Rublevskoye Highway (prestigious area of luxury villas outside Moscow) is put up for sale, while in 2008 this figure stood at only 15%.

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