Luxury residential property abroad is still popular with
- Prime residential property gets biggest investments in expensive countries
- Low/medium budgets destined for foreign commercial real estate
- UK, France and Switzerland have highest spending compared to local budgets
- Cheapest property markets see lowest spending and smallest budgets
- +440% spending over local average for residential property in Switzerland
- –70% spending under local average for commercial property in the UAE
Residential property: outbidding the locals
The more expensive the country, the more Russian and CIS buyers will spend on residential property is the main conclusion of this Tranio report. These buyers outbid the local average budget in all but two out of twenty top investment destinations.
Highest budgets in most expensive countries
For instance, they spent 440% more on average for residential property in Switzerland, 350% more in the UK and 130% more in France.
Russian/CIS spending vs. local budgets in top 20 destinations
|Residential property||Commercial property|
Russia/CIS budget, EUR thousands
Russia/CIS budget, EUR thousands
** Compares average Russian budget to local average spending in country
Lowest budgets in cheapest real estate markets
In the lowest budget segment, Russian and CIS buyers spend between €60,000 and €75,000 per property on average — just 10% more than the local average budget in the three cheapest countries: Bulgaria, Hungary and Turkey.
Czech Republic (+0%) and Thailand (–20%) stand out in this research as being the only countries where
Interestingly, most residential purchase averages are well below the preferential visa thresholds for property investments set out by Europe’s most famous Golden Visa programmes (below). At the same time, for instance, the minimum investment in Portugal is €500,000 — a particularly high sum when the average price for a property of 100 sq m is just €130,00.
Average Russia/CIS spending vs. “Golden Visa” investment thresholds
Currently, it would seem that permanent residency may not be a catalyst for
Commercial property: yields, not prestige
In contrast to activity on the residential market,
Below budget spending on commercial property
In fact, Russians only pay more than the local average per property in six countries: Turkey, Portugal, Latvia, Croatia, Spain and the UK.
More loans to leverage yields
Buyer activity in the UAE provides a stark contrast with residential habits, as Russian and CIS citizens pay 70% less on average for commercial real estate — but 40% more in Spain. This is conditioned by the availability of bank loans, which are rarely granted to foreigners in the UAE but used to leverage the investment in Spain so as to increase yields. According to a Tranio survey of Spanish real estate agencies, over half the respondents report that more Russian and CIS buyers have been obtaining loans, from 18% of buyers in 2013 to 31% in 2015.
Many visa programmes in the EU accept buyers who choose commercial property (e.g.,
In brief and to come
Russian and CIS investments have changed in the wake of the currency crisis and ensuing recession. Both internal and overseas property investments have suffered from the economic turmoil and Russian investments in foreign property were halved by
- Moscow real estate goes from boom to bust
- Russian buyer activity report 2014
- Russia toughens up on foreign corporations