The purchase by Russians of foreign real estate fell to the lowest level in seven years

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The volume of cross-border real estate transactions in April—June this year declined by almost 16 percentage points compared to the same period last year, concluded analysts Tranio, based on data from the Bank of Russia. In the second quarter the volume of transactions with foreign real estate amounted to $193 million versus $229 million for the same period last year. Its minimum value, the figure reached in the first quarter 2009 — $173 million.

Compared with the peak value that was reached in the fourth quarter of 2013 ($676 million), the volume of transfers has decreased in 3,5 times. Only up to half of the amount of purchases of Russians in foreign real estate fell by 23 percentage points — up to $392 million versus $510 million in January—June 2015.

Most active in the second quarter of 2016, the Russians transferred the money to buy real estate in Switzerland, Latvia, China, USA and UK. Despite this, the volume of sales in London declined by 80-90% because of Brexit, as well as in Turkey due to the unstable situation in the country, said managing partner Tranio Georgy Kachmazov.

Reduces not only the volume of operations on transfer of funds to purchase foreign real estate, but the total amount of monetary transactions (in addition to real estate including transfers to pay for various services and goods). From April to June 2016 the total amount of multi transfers from Russia amounted to $5.6 billion by 13.5 p. p. less in comparison with the second quarter of 2015. Thus, the property had 3.5% of the total volume of cross-border transfers from Russia.

The main reason for the decline in investment in the purchase of residential property abroad Georgy Kachmazov calls the economic crisis in Russia. “The negative trend is likely to continue in the third and fourth quarters, he said. — At the same time, we see that the number of people willing to invest remains stable. In the next six months, the company’s specialists predict a rise in the number of investors. It will be possible on the background of reducing the return on deposits, which part of the capital people will reallocate into real estate, generating higher foreign exchange income.

“We see that Russians don’t just have less to buy real estate abroad, but also changed the structure of its assets, — the Director for work with key clients of the Department of elite real estate Knight Frank Elena Yurgeneva. — If eight or ten years ago was dominated by the holiday property, the purchase made on an emotional wave, now vector shifts towards commercial real estate or residential real estate, but who will bring in guaranteed income.” Now even the most wealthy customers rent out their homes in London and a Villa on the cap Ferrat, because the cost of servicing the foreign real estate is as relevant as ever, says an expert.

Much less steel to buy resort property in Montenegro, Bulgaria and Italy, while stable demand is maintained at the sites in Spain and Germany, accepts his. “Germany is interesting from the point of view of investment, whereas in Spain, the rise in cost per square meter,” he explains.

“Customers buy more objects street-retail, small offices and hotels, student apartments and Parking, as well as invest in housing which is subject to reconstruction with a view to resale,” adds the Chairman of the Board of Directors of Kalinka Group Ekaterina Rumyantseva.

The Central Bank maintains statistics on the volumes of cross-border real estate transactions since 2009. According to her, until the end of 2013, Russian investments abroad grew, but since the first quarter of 2014 the trend has changed the vector, and their volume began to decline.

In Tranio pay attention to the fact that analysts of the Central Bank, include only monetary transactions of individuals. the majority of commercial property transactions remains outside the statistics of the Central Bank due to the fact that many Russian customers make the purchase of such objects by a legal entity, conducting transactions with their foreign accounts. Despite this, the Central Bank statistics reflect a General trend, noted in the company.