Photo: Mundane Rossiya
Russian buyers have been a dominant force in the overseas real estate industry in recent years, as the expanding middle-class and wealthy investors both sought to purchase property in other countries. In the past year, though, Russian buyers have dwindled in number.
The decrease has largely been fuelled by the country’s economic conditions: since sanctions were imposed by the US in response to the Ukraine crisis, the ruble has plunged. At the end of last month, the Russian currency was worth approximately one US cent, down 40 per cent from its value in January 2014.
As a result, Russian spending power has been severely impacted. Mark Harvey, France’s residential expert for Knight Frank, tells the New York Times that Russian buyers have “all but disappeared” from parts of the south of the country. In St.-Tropez, for example, demand for luxury villa rentals fell 20 per cent year-on-year.
The same trend has been observed by Knight Frank in London, with Russians accounting for 3.5 per cent of all home sold in the prime centre of the capital in 2014, down from 5.2 per cent in 2013.
Harvey notes that the richest still have the capital and the desire to buy, but that other buyers have declined.
Across Europe, Russian investors have also retreated. Official statistics for Spain, where Russians were driving activity a few years ago, found that French purchasers now make up 10.48 per cent of the market, ahead of German buyers )6.45 per cent) and Belgians (6.19 per cent) but behind the Brits (18.06 per cent).
In Finland, meanwhile, the flow of Russian buyers in the leisure home and summer cottage sector has “ebbed entirely”.
“There are practically no Russians in the market for houses like these right now,” realtor Ari Punnonen from the Southern Karelia real estate firm OP-Kiinteistönvälitys told yle.fi.
The National Land Survey of Finland recorded the lowest number of Russian leisure home buyers in 2013 for six years, with investors now thought to be focused on selling property instead.
Even in Bulgaria, the perennial holiday home favourite for Russians, the status quo has reversed.
“Their absence has left quite a void,” Harvey says of France.
In Bulgaria, though, domestic buyers are stepping into that gap.
“We expect that next year the real estate market will be driven largely by the Bulgarian buyers including the segments that were traditionally dominated by the foreign buyers,” predicts Polina Stoykova, Managing Director and Head of Research for BulgarianProperties.com.
As for Spain, Marc Pritchard, Sales and Marketing Director for leading homebuilder Taylor Wimpey España, forecasts that Belgian and Dutch, and also Swiss buyers, will be “particularly influential” in the Spanish property market during 2015.
Source:: The Movechannel