Directional Overview: Where Russians buy real estate abroad

At the beginning of 2024, the demand for the purchase of foreign real estate from Russians decreased by 10-50%, according to various experts. Fluctuations in the foreign currency exchange rate, especially the dollar, have been a significant contributing factor. As the financial side of the issue began to stabilize in the country, interest in real estate in other countries started to increase again. 

In the first quarter of 2024, cross-border transactions of Russians buying foreign real estate increased by 15% compared to 2023. However, new, potentially interesting destinations for Russian buyers have emerged on the market.

Read our article about which properties were most popular with Russians in 2023 and how the market is developing in the current 2024.

Actual destinations for buying real estate in 2023

The top five most popular countries for Russian real estate buyers in 2023 were Turkey, the UAE, Georgia, Montenegro, and Thailand. The demand for housing in Bulgaria was comparable to that of the previous three countries. The selection of these destinations was largely influenced by the availability of favorable programs for permanent residence in these countries.

For instance, in Turkey, the purchase of real estate is one of the eligibility criteria for obtaining a long-term residence permit, which, in turn, allows applicants to apply for citizenship. In the UAE there is no such thing as a permanent residence permit. Instead, a long-term, visa-required residence permit is issued for investments in the country, including real estate purchases. The duration of the visa is determined by its value.

In Georgia, a permanent residence permit for investments in real estate can be obtained for an amount of $100,000 or more, provided that one or more properties can be purchased on the primary or secondary market and financed through credit.

In Montenegro, the cost of housing is irrelevant when applying for a permanent residence permit. However, there is one stipulation: the property must be free of encumbrances, such as a loan or mortgage. The permanent residence permit is issued for one year with the possibility of an extension. However, it does not entitle the holder to work in Montenegro or to apply for permanent residence.

To obtain a permanent residence permit (and permanent domicile) in Cyprus, it is necessary to purchase a property from a developer, which must be a new construction. The minimum price for the property is 300,000 euros. 

Furthermore, in 2023, Russians demonstrated interest in the European market, even though EU countries have been identified as unfriendly to Russia for political reasons since 2022. The top four countries were the United Kingdom, France, Germany, and Spain. 

In 2024, the list of popular destinations for real estate purchases underwent a significant shift. Many of the countries included in the 2023 list retained their positions, but their relative rankings changed. 

Leading countries for real estate purchases by Russian buyers 2024

This year, there has been a notable increase in Russian interest in Asian destinations. Thailand led the demand for real estate, with 96% of all buyers' applications as estimated by Tranio. From January to March 2024, Russian buyers purchased 9,300 properties in Thailand, according to Ricci | Foreign Real Estate. At the same time, there is growing interest in Indonesia, with current offers to purchase real estate in Bali. Furthermore, Vietnam has also seen a 43% increase in applications from Russian buyers in 2024.

The popularity of Asian destinations is driven by the availability of bank transfers from Russia, a robust remote transaction system, and the region's investment appeal. Additionally, real estate prices in Asia are often more affordable than in Turkey and the UAE. Another factor of interest to these locations is the growing presence of developers with Russian participation. These developers are adept at combining the features of local markets with the approach of Russian investors and buyers. Furthermore, it is important to consider the availability of direct air transportation between Russia and Thailand.  Additionally, Bali plans to launch a direct air service with Russia by the end of 2024.
 

Nevertheless, the leaders of the previous 2022 and 2023, Turkey and the UAE continue to be of interest to Russians in terms of purchasing real estate, although with a decrease in demand. The total number of purchase applications in the UAE (as estimated by Tranio) decreased by 25%, while in Turkey it decreased by 27.5%.

Once again, there have been changes compared to 2023. In the UAE, there is a demand for real estate in neighboring emirates with Dubai, which is just beginning to "open up" in terms of its potential. In Dubai, the volume of transactions in the secondary real estate market has increased (note: this includes so-called fix-flipping, which is the acquisition of secondary housing with subsequent renovation for resale). 

Turkey remains a popular destination for Russian buyers, with Istanbul and new coastal locations attracting interest in addition to the traditional Antalya and Alanya.

In the UAE and Turkey, the demand for premium real estate remains strong, despite the sector's marginal position. It is important to note that these two countries will continue to be relevant for Russian buyers, investors, and tourists due to the presence of stable, established Russian-speaking communities. 

The deterioration of political relations between Russia and some European countries has not affected the continued high level of interest among Russians in purchasing real estate. In 2023, Greece, Spain, France, Germany, and Cyprus remain the leading destinations for Russian buyers. The primary motivation for them in these countries is to obtain a residence permit. In particular, the new rules in Germany allow immigrants to obtain citizenship after five years without an "ultimatum" to the first citizenship, regardless of the country of origin.

In 2024, Oman will enter the real estate market. The advantages of buying in Oman are clear. First, it is a state with a stable economy, neutral international policy, and a high level of security. 

Secondly, Oman's location at the border of the UAE offers the opportunity to move easily between business locations. Furthermore, flights to Oman from Russia are direct. Thirdly, the country's natural advantages include a long coastline, diverse nature, and a climate that is conducive to living. In terms of purchasing real estate, a significant benefit for Russians is the absence of property taxes and the ability to obtain a residence permit.

Rules for Russians to buy foreign real estate

Basically, the rules on transactions involving the purchase of foreign real estate for Russians come down to the status of the country where the property is located. Such restrictions were introduced in 2022 for political reasons and remain relevant in 2024. 

When purchasing real estate in countries friendly and neutral for Russia (Turkey, UAE, Georgia, Egypt, Indonesia, etc.), Russians are allowed to: 

• transactions with residents of that country; 

• transactions with residents of Russia with payment in rubles; 

• transactions with residents of unfriendly countries with payment to foreign accounts, information about which is disclosed in Russia.

In the case of buying real estate in countries unfriendly to Russia (Europe, USA, etc.), Russian buyers may also conclude transactions with residents of unfriendly countries through foreign accounts, information about which is disclosed in Russia. The procedure for working with the account is as follows: 

• opening a foreign account in a friendly country with submission of a notification of opening to the Federal Tax Service of Russia; 

• transfer of funds from Russia to the foreign account within the limit of $1 million per month; 

• payment for the purchase of real estate by transfer to the seller's account in an unfriendly country.

Useful insights for foreign real estate sellers

The rules of the foreign real estate market have undergone significant conceptual changes for Russians since 2022, and these changes are ongoing, with the majority being for the better. Russian citizens currently face a number of challenges when purchasing real estate abroad. These include global shifts in investment patterns, the difficulty of transferring funds without restriction, and the impact of sanctions. Furthermore, fluctuations in currency impact the decision to purchase. Nevertheless, there is still a high demand for foreign real estate in Russia. The primary distinction between the two periods is the selection of locations. 

The most popular countries for real estate purchase in 2024 are and will be those considered "friendly states," such as Thailand, Indonesia, Vietnam, the United Arab Emirates, and Turkey, which are viewed as highly profitable investment opportunities. Additionally, European real estate remains a popular choice for Russians with a high level of income, as it was in 2023. 

It is of the utmost importance to consider these factors when marketing foreign real estate to the Russian-speaking audience. Potential buyers should be made aware of the profitable investments, citizenship opportunities, and attractive locations for life that are on offer. Each project is unique and requires the input of experienced specialists to complete a thorough analysis and practical work. To contact the RMAA team, complete the application form in the Contacts section. 

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