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Where Wealthy Russians Buy Real Estate: an Overview of 2021 and Prospects for 2022



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Despite the periodic fluctuations of the ruble against foreign currency, pandemic and other economic changes on the world market, the demand for foreign real estate among Russian investors is still growing.

As noted by Irina Mosheva, a partner of the international brokerage company Savills, foreign real estate belongs to the category of defensive assets for Russians. In times of crisis, they often turn to these investments. For example, during the pandemic, Russians had a grown interest in houses, apartments and commercial facilities abroad. Now the picture is approximately similar.

Forbes, which is the respected business publisher, referring to Knight Frank data, found out at the end of 2021 that wealthy Russians bought foreign real estate assets for three main reasons:

  • the aspiration to obtain a second citizenship (66% of requests);
  • acquisition of real estate for own residence (20% requests);
  • prospects for passive income from renting property, as well as running own business in other countries (14% of requests).

Source: Forbes, Oct. 2021. *Dominican Republic, Latvia, Montenegro, Israel, Saint Kitts and Nevis, Thailand account for 1% each

Depending on these requests, the foreign real estate market was divided into many key areas by the end of 2021. But the situation changed at the beginning of 2022 due to the "tense" political situation.

The point is that on March 5, 2022, the Russian government approved the list of foreign states that commit "unfriendly" actions against Russia. It includes most of the countries of Europe, the USA, Japan, Canada, New Zealand, etc. In this regard, economic relations between the Russian Federation and other foreign regions have either become more complex or are completely absent.

Of course, these factors have also affected the real estate market. New areas have opened up for Russian investors (UAE, Georgia, etc.). However, wealthy Russians are still interested in real estate assets in Europe, despite a number of restrictions compared to previous periods.

RMAA experts found out why the European real estate market became in demand in 2021 and what to expect for Russian investors when choosing this areas in 2022.

Great Britain, Spain, Greece. Premium real estate as an opportunity to become a citizen of a country on “golden” terms

According to statistics from all three European countries, Russians turned out to be on the list of foreign buyers of real estate of premium segment. The reason for this is quite simple and connected with a more simplified obtaining of a residence permit and citizenship when making transactions with expensive real estate property. These are so-called “Golden Visas” and “Golden Passports".

By the way, since 2007, England has focused an intensive activity on reducing immigrants. Therefore, acquisition of real estate in the region is almost the only way to obtain citizenship for foreign investors. In addition, buying an estate property will not be enough, since the government requires foreign buyers to invest in the country's economy, at least 1 million pounds. Upon fulfillment of this condition, the owner receives the right to a so-called “Golden Visa” (residence permit), and after 6 years (according to the conditions of stay in the country) - a “Golden Passport”.

Despite such difficulties, the demand of Russian investors for the purchase of luxury housing in London in mid-2021 increased by 25% compared to the previous one (comment - Knight Frank statistics). High-cost transactions were predominantly made by wealthy Russians, for whom England is one of the reliable regions for saving their assets.

A similar situation in 2021 was in another European region that is Spain. To tell the truth, the process of obtaining citizenship and residence permit in Spain is much easier than in the above mentioned UK. For example, since 2015, foreign investors have been allowed to draw up a preliminary contract for purchase of real estate and expect to receive a residence permit for up to 6 months, as well as the right to conduct own business within the country. To apply for a Golden Visa, a buyer was required to purchase real estate from 500 thousand euros, after which the Spanish government provided him with a simplified procedure for obtaining citizenship. Russians considered such conditions quite “comfortable".

For this reason, Russian investors entered TOP 5 buyers of the most expensive Spanish real estate by the second half of 2020. On average, the cost of the property per square meter cost them about 2,100 Euros. More expensive real estate was purchased only by citizens of Denmark, Switzerland and Germany (2,400-2,500 Euros per sq. m.). For the period of 2021 about 79,000 Russians lived in the region, most of whom had real estate in the coastal resort areas of Alicante (16,500) and Barcelona (15,600). The most popular types of real estate here are villas and townhouses.

Just like in Greece. Actually, compared to England and Spain, the country has more favorable conditions for obtaining a “Golden Visa”. The investor needs to purchase property in the amount of 250 thousand euros. According to the Greek Ministry of Migration, the number of Russian recipients of the “Golden Fund” in 2021 increased by 79% from 2020 and reached 576 people (3rd place among foreign buyers). The most popular Greek regions for buying real estate were resort areas Mediterranean (Mykonos, Nice, Marbella and Santorini).

"There is a shift towards quality among foreign buyers in Greece, as investments in Greek real estate are seen as a safe harbour," said Giorgos Gavrilidis, CEO of Elxis.

In other words, the UK, Spain and Greece in 2021 were the top-priority European regions for buying real estate among wealthy Russians. The countries offered buyers reliable protection of assets, as well as favorable conditions of citizenship. At the same time, the more Russian investors “invested” in business and real estate, the easier the procedure for its registration was for them.

Montenegro, Italy, Bulgaria. Real estate for a comfortable rest

In these regions, real estate transactions are connected not only with the premium category.

According to the results of 2021 in Montenegro, Russians often bought secondary real estate (from 25 thousand euros) and apartments in new buildings with an average check of 60 thousand euros. Moreover, most often investors chose mainly resort areas - Bar, Budva and Tivat. On the other hand, the demand among Russians was significantly affected by the simplified citizenship program of Montenegro, according to which the applicant had to buy an object in special zones for a certain amount (in the north of the country - from 250 thousand euros, in the south - from 450 thousand euros).

The same can be said about another European region - Italy. In 2021, real estate transactions were various, starting from the purchase of cheap properties in Calabria (up to 50 thousand euros) and ending with the purchase of luxury villas in Liguria and Tuscany. In addition to these areas, Russian buyers chose real estate in Rome and Milan. Thanks to this, Italy in 2021 was on the 5th place as one of the most popular European real estate markets for Russians.

The demand for real estate in these regions is connected with the fact that most wealthy Russians consider Montenegro and Italy as comfortable European recreation areas. Firstly, due to the warm climate with a vast area of the coastal strip. Secondly, because of the simplified system of entry into a country. By the way, a visit of Montenegro is visa-free for Russian citizens, and, in turn, the Italian visa is considered one of the most affordable and fastest for processing. Therefore, Russian tourists who rest in Montenegro and Italy eventually become owners of real estate in these regions.

The real estate market in Bulgaria can be described with the same conclusions. According to experts, in 2021, the country was in the second place upon requests of buyers from Russia. Indeed, Russian investors preferred real estate in Bulgarian resort areas: the Black Sea coast (Sunny Beach) and ski regions. Basically, the transactions were concerned apartments in large housing estates built not later than 20 years.

However, everything is not so simple, because it is not the first year that real estate prices have been rapidly rising in Bulgaria, and in 2021 the market completely “dried up” due to the lack of any offers. This caused a decrease in demand among buyers, including Russian ones, by mid-2021. At the end of the year and up to now, some Russians, on the contrary, began to sell real estate assets in resort areas.

In an interview with a news publication “Izvestia” Philip Berezin, Chief Analyst and Editor of the real estate portal, explained that in Bulgaria in recent years, mainly objects in large cities have become more expensive — by 3-4% per year, and prices at resorts have been stable. In 2021, the situation has changed: growth is also recorded at resorts, it exceeds 6%, it is approaching 10% for liquid assets.

In addition, at the beginning of 2022 Bulgaria closed the “Golden Visa” program that implies the investment in the country's economy, because this request is not popular (96 people in 2021 - Russians and citizens from the Middle East).

Then, at the end of February 2022, “Golden Visas” were canceled by a number of other European countries, including the UK, Montenegro, Spain, Greece, etc. But it happened due to political considerations.

What Awaits Russian Investors in These Areas in 2022?

Amid new sanctions against Russia imposed due to political differences, since February 28, 2022, the European real estate market has become less accessible to Russians. In addition, most European countries have restricted entry even for tourists. For these reasons, many Russian citizens who own property in European regions have started selling their assets. This trend was noted by experts on the search for real estate abroad , noticing a large number of offers for sale on their service.

The exception from the list was Montenegro, where Russian investors began to re-register property on other persons (data from the regional source Pobjeda, based on realtor requests). At the same time, Russians do not consider it reasonable to sell real estate, since the government has not yet made a final decision on the sanctions policy against Russia. The principle is as follows: if the state can confiscate monetary assets, then the re-registered real estate will not be able to fall under any sanctions.

However, everything is not as critical as it seems at first glance. Since most of the sanctions affected the “Golden Visa” and “Golden Passports" programs.

“Golden” Passports and visas in the near future may not be available not only for Russians, but also for citizens of all countries — this was stated in the European Parliament even before the conflict in Ukraine… The meaning of the new project is phasing out of "Golden" Visas, Passports and investment programs by 2025, up to that moment their strict regulation is stipulated… Parliamentarians state: many years of experience have shown that "Golden" Passports and Visas provide huge opportunities for laundering income and promoting corruption throughout the EU." (Georgy Dokuchaev, expert on foreign real estate Prime Property Group in an interview for RBC)

In other words, Russian investors are not prohibited from buying real estate in Europe. Moreover, this applies to both expensive premium properties and small apartments, secondary property, etc. types. Of course, the procedures of citizenship and residence permit when making transactions will be much more complicated, but still they are, and not completely canceled. For example, in Spain, when buying real estate, an investor can confirm his financial independence, and then apply for a residence permit with year-round residence in the region.

In other words,

buying European real estate is still a topical issue for wealthy Russians, as in 2021. But with some sanctions adjustments. This factor should be taken into account when promoting real estate of various categories for Russian buyers. Also, you should pay attention to the changed advertising trends in the region (related to the blocking of some advertising channels in Russia).

RMAA experts will help you to look into this issue more closely in order to create an effective marketing strategy to attract Russian investors interested in buying real estate.

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About the Author

A content lead. Natalia runs marketing projects promotion with different digital tools in the Russian-speaking market. 


Author Natalia Gorenkova

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