The Russian investors activity in overseas property market, and UK in particular, is switching from the path of rapid growth to accelerated falling. Most potential investing customers receive salaries in local currency, and along with the sharp decrease of the Russian economy the price for the real estate has risen by 50% in less than 2.5 years. In addition to the price of the available options, significantly increased the cost of maintenance of apartments and houses, and naturally, the cost of conveyancing solicitors services.
The state of affairs is most probably going to have a long-term effect. The dynamics of the economy in projection on overseas property investment is pre-determined for at least the next year. The economic situation, in turn, is largely dependent on the foreign environment, the continuation or termination of sanctions, the dynamics of national currency fluctuations and the of oil prices. However, the situation may not change significantly as the demand for overseas property from Russians is expected to rest at the same level due to capital transfer from the country. Firstly, a large part wealthy Russians is interested in foreign trade of real estate, including those that hold savings in more stable currencies or paid in foreign currency. The fall of the ruble does not negatively affect them. Secondly, there has been a change of priorities recently. Previously, the majority of customers considered buying resort property for their own leisure in Spain, Bulgaria, Montenegro, but now such purchases are declining, and emerges a larger group of buyers who buy real estate for investment objects. By investing in profitable real estate individuals and businesses are traditionally trying to diversify their assets, to protect themselves from hazards and create a ‘reserve airfield’. Thirdly, through foreign real estate agencies specialising in the Russian customers real estate is oftentimes purchased by citizens of other CIS countries, such as Kazakhstan. Their purchases are sometimes credited as ‘Russian’ and technically affect the performance demand.
A look into the 2016
So what trends will be see this year? The process of Investing in profitable real estate liquidity of stable economies will increase. The most significant reason for Russians customers acquiring overseas property is political and economic stability. These factors are important for home buyers in the UK and Germany: this reason was noted by 82 and 76 per cent of respondents, respectively. After stability comes the climate, this is where the United States and France are leading the race, while in the United States this factor is considered in conjunction with price (52.8% of respondents). Interestingly, when Russian problems in the economy emerged, a surge in interest in the real estate options of the following countries was observed: UK, Germany, USA, France. In November and December 2015 it was recorded an increase in demand for profitable real estate. The Russians are in a hurry to invest surplus funds amid rising dollar. Up to 30% of buyers purchased overseas property for investment purposes. In addition, many foreign objects purchased to create a ‘reserve airfield’.