Flight options: Russians have become less likely to buy housing abroad
In 2024, Russians purchased real estate abroad 20-25% less frequently than a year earlier, market participants told Izvestia. The interest decreased primarily due to numerous restrictions, including in currency settlements, and difficulties in obtaining residence permits in other countries. "Sagged" purchases even in Turkey, UAE and Cyprus, although these destinations have always been among the most popular for the purchase of housing. The average purchase budget has also decreased by 35%. This trend will continue in 2025, experts believe.
Where the demand abroad has fallen
According to the results of 2024, the demand of Russians for foreign real estate fell by 20-25%, market participants told "Izvestia". According to analysts of Kalinka ecosystem, this is due to a drop in demand in key destinations: Turkey, UAE and Cyprus, which were popular in 2022-2023. And the average real estate purchase budget has decreased by 35%.
- In 2024, the demand of Russians to buy foreign real estate fell by about a quarter compared to 2023 - confirmed and CEO of the agency of premium resort real estate Golden Brown Group Tatiana Burlakovskaya. - This can be explained by the satisfaction of the hype demand in 2022-2023, difficulties with the payment of transactions, strengthening currency control and tougher conditions for obtaining residence permits.
According to her, the strongest demand has fallen on Turkey - up to 100%, that is, the deals have practically stopped, on Egypt - 60%, the UAE lost 20%.
- European countries are becoming less and less popular every year, demand for them last year fell by another 10-20% depending on the specific destination, - added the expert.
At the same time, there is an increase in demand for real estate in Thailand, Bali, Montenegro and Georgia - for the year by 20-25%.
- Growing activity of Russians in the markets of the Middle East: Saudi Arabia, Bahrain, Oman, which begins the realization of new projects - said the business director of Kalinka Middle East Alexander Shibaev. - Despite the higher budget threshold of $450-550 thousand per lot, the demand from Russians for them is growing. The UAE market is oversaturated with projects, and new destinations in the Middle East provide an opportunity to diversify the real estate portfolio.
The growing share of inexpensive destinations, such as Southeast Asia and Georgia, influenced the decrease in the average budget for the purchase of foreign real estate by 20% relative to the results of 2023, where the average budget was $165-170 thousand.
According to the company "Ricci | Residential Real Estate", at the end of 2024, the demand for foreign objects remained at the level of 2023. But the priority destinations for real estate acquisition have changed - Thailand and Bali took the leading positions.
- In the first half of 2024, we recorded a 20% decrease in demand for the purchase of real estate in the UAE, which enjoyed the interest of buyers in 2023 - said the general director of the company Ekaterina Lomteva. - Montenegro shows a decrease in demand after the closure of the program of citizenship in exchange for investment.
At the same time, over the past year, demand has increased for residential real estate in Uzbekistan (+3%), Kazakhstan (+5%) and Kyrgyzstan (+16%), said Olga Polovnikova, director of the department for the development of the franchise network of the federal company "Etazhi".
Which directions are stable
In 2024, the UAE real estate market demonstrated stability, and Russian investors continue to occupy leading positions among foreign buyers, added Olga Pankina, head of the Whitewill Dubai office.
- If in 2022-2023 the main attention was focused on the primary market, today we see dynamic development of the secondary real estate segment and rentals, - she said. - This is a natural process: after a wave of purchases in previous years, many clients have moved into the phase of active asset management, leasing and resale.
Dubai remains the top destination, especially in the premium and business categories of real estate. However, there is also continued demand for commercial real estate. This is due not only to the attractiveness of the UAE as an international business hub, but also to the strengthening of economic ties between Russia and the Emirates.
- The main clients are still coming from major Russian cities, but this year we are registering a growing interest in alternative destinations - Ras Al Khaimah and Oman, - added Olga Pankina. - This is explained by investors' desire to find new points of growth and more favorable conditions for investments.
In the top three from 2023 also remained the UAE, but the interest in buying real estate from developers replaced by distress deals (selling an apartment at a price lower than its real value) and transactions in the secondary market, told "Izvestia" founder of the international company for foreign real estate Nevestate Ekaterina Nikitina.
In addition to the UAE, Russians in 2024 actively bought real estate in other Gulf countries - Oman, Bahrain and Saudi Arabia. Among the buyers were both those who have already bought something in the UAE and considered investments in alternative destinations, as well as those who believe that the Dubai market is overheated.
What lies ahead for the overseas real estate market
The political situation has a significant impact on the foreign real estate market, said Ekaterina Lomteva. Investors now prefer real estate in friendly countries.
Many investors preferred to reallocate their funds into Russian assets, including real estate, as well as into local financial instruments, such as bank deposits, because of attractive rates, said Ekaterina Nikitina.
- Currency appreciation has affected those who planned to buy real estate from the developer in installments, - she noted. - Fears of inability to service obligations forced many to abandon deals or reconsider their plans. Currency risks became one of the main factors that slowed down the market. Despite the general decline, interest in certain regions remains. The most stable destinations remain the countries of South-East Asia and the Persian Gulf.
At the same time, the demand for European residence permit programs for investment will remain, the expert believes. Thus, if in 2025 in Hungary this program will be launched in full, it will be able to attract significant interest of Russian investors.
Spain after the closure of the program of issuing "golden visas" for investment in real estate, which is expected in April 2025, as well as the introduction of 100% tax for non-residents of the EU instead of the current 7-12% will begin to fall, said Tatiana Burlakovskaya.
- We predict that interest in buying real estate in Turkey to obtain citizenship will begin to recover after a lull in 2024, - said Ekaterina Nikitina. - In Dubai is expected to maintain high demand for secondary real estate and distress assets. Interest in real estate in Abu Dhabi will increase, where the state is actively investing in the development of tourist infrastructure.
In 2025, according to experts, the number of foreign real estate transactions will remain at the level of 2024, as such an acquisition is an opportunity to obtain immigration status, income in currency and a place to live and rest. However, the Russian market for buyers now looks safer and clearer for investment, especially against the background of active development of domestic resorts and the entry of major players there.