How did the activity of Russian-speaking real estate buyers change in 2022?

The growing interest of Russian-speaking real estate buyers in 2023

By the beginning of 2023, there has been a sharp increase in interest among Russian-speaking buyers in foreignreal estate, which has exceeded the figures of the first quarter of 2022 by more than two times.

In countries where Russian-speaking citizens from Russia and other CIS countries are active, realtors are making optimistic forecasts about the real estate market, unlike in regions where the interest from compatriots is less noticeable.

This became one of the key findings from the 11th annual survey conducted among professionals in the international real estate market, including realtors and builders. The survey, carried out in early 2023, included 189 experts from 32 countries around the world.

Activity of Russian-speaking buyers

Russian-speaking buyers continue to hold an important position in the global real estate market. Almost half of the participants (49%) believe that in 2022, this group was the most active among foreigners in the countries where realtors operate.

At the same time, the same number of respondents noted that buyers from European countries also played a significant role in the market. Some of the surveyed mentioned the activity of clients from:

• Israel
• China
• Countries of the Middle East
• United States

Comparative analysis of customer activity

Survey data shows that 2022 was a year of increased activity for Russian-speaking buyers in the international real estate market compared to 2021. This is confirmed by a 7 percentage point increase in the number of respondents who identified this group of buyers.

At the same time, the participation of European buyers in the market has noticeably decreased: the number of mentions of them has dropped by 13 percentage points compared to the previous year.

Results of the comparative analysis with previous years

Comparing the obtained results with data from previous studies, it can be stated that 2022 was a landmark year in terms of activity among Russian-speaking buyers since 2012. In particular, during this period, the highest level of activity for this category was recorded in the global market.

The trend identified in 2021 continued: the higher the activity of Russian-speaking buyers in a specific country, the less interested local markets are in buyers from European countries, and vice versa.

Examples of activities in different countries

For example, in Georgia, all respondents (100%) identified Russian-speaking buyers as the main category, without mentioning Europeans. Similar results are observed in other countries:

• In Turkey, 94% of respondents noted the activity of clients in the Russian-speaking segment.
• In Cyprus: this figure was 73%.
• In Montenegro, 71% of respondents noted the activity of Russian-speaking clients.

Conclusion

Thus, it can be concluded that in 2022, there was an increased overall interest in real estate among Russian-speaking clients, which has the potential to positively impact the further development of the international real estate market.

Analysis of customer activities

As part of the study, participants were given the option to select multiple answers, which explains why the total number of votes for Russian-speaking and European clients may exceed 100%. It has been noted that there is an inverse relationship between the activity of migrants from European countries and the visibility of Russian-speaking buyers: the higher the share of one group, the less active the other is.

In the Czech Republic, all respondents noted a clear predominance of European buyers, while none of them reported any Russians or migrants from the CIS.

Europeans in the real estate market

European clients indeed hold significant positions in Germany, where their support accounted for 89% of the votes, in Bulgaria — 83%, in Spain — 82%, and in Italy — 77%. Notably, in Greece, European buyers performed the best, scoring 39%, while the activity of Russian-speaking clients was 26%.

• Greece is becoming attractive for investment due to the stable growth in real estate prices.
• In the capital, Athens, the cost of housing has increased by 32% over the past four years.
• Current rates are still 20-25% below the peaks of 2007.
• The expected return from long-term rentals in the capital is between 4% and 4.5%.

Dynamics of Russian-speaking buyers

Elena Milishenkova, who holds the position of commercial director in Greece, reported that in 2022, the activity of Russian-speaking clients was similar to that of European investors. It is particularly worth noting the growing interest of Russian-speaking buyers in real estate in Turkey and the United Arab Emirates.

According to the survey results, these buyers have significantly increased their investments in the countries where they already had an active presence in the real estate market, while their operations in less popular countries, on the contrary, have decreased.

Trends at the beginning of 2023

The first months of 2023 showed a significant increase in interest among Russians in real estate in the UAE, where the number of transactions rose by 1.3 times compared to the beginning of 2022, while in Turkey this figure is 1.9 times.

According to the Turkish Statistical Institute, in February 2023, the number of properties purchased by Russians increased by 2.3 times compared to the same month last year. These findings align with the results of a survey, although some discrepancies may arise because the study included not only Russians but also other Russian-speaking citizens.

Decline in interest in Bulgaria and the Czech Republic

On the other hand, in Bulgaria, which was previously considered a popular investment destination, there has been a sharp decline in interest from Russian-speaking buyers — their activity has decreased by 5.8 times over the same period. The Czech Republic also noted a decline in activity of 5.3 times, while in Italy, the decrease was 5.0 times.

Thus, the beginning of 2023 shows an increase in purchases by Russians in Turkey by 1.9 times and in the UAE by 1.3 times compared to the same period in 2022, indicating a continuation of changes in preferences for choosing countries for real estate investment.

In 2022, the main incentive for Russian-speaking clients looking to purchase real estate remained the opportunity to obtain residency or citizenship through investment. Surveys showed that this factor was noted.52%respondents. Despite the existing sanctions and restrictions, interest in obtaining "golden visas" and "golden passports" has remained at a level comparable to 2020, when about56%People expressed similar intentions. Some buyers from Russia in the spring of 2022 were developing comprehensive investment strategies, including the purchase of real estate in Turkey to obtain a "golden passport," as well as for subsequent investments in Western countries.

Opportunities for Turkish citizens

Turkish citizens are given the opportunity to obtain a residence permit in Greece or an E-2 visa in the USA, however, Russians do not have the option to take advantage of the latter. As noted by Elena Milishenkova, the commercial director, interest in investment residency remains popular among various countries, just as it was two years ago. In Turkey, this motive has been agreed upon.89%respondents, in Greece –85%Such intentions are more than just50%respondents are also observed in Spain, Cyprus, and Montenegro. For the first time in 2022, Georgia made it onto the list of the most interesting destinations, as60%The respondents expressed interest in obtaining immigration status through the purchase of real estate.

Residency programs through investment

The most active requests for residency programs through investment are observed among Russian-speaking clients in Greece, Turkey, and Cyprus. According to survey participants, the number of Russian-speaking individuals interested in these programs increased, on average, in 2022.1.7 timesAlthough the dynamics vary significantly across different countries. The highest growth is observed in:

• UAE - increase in4.8 times,
• in Cyprus — in4.4 times,
• in Turkey — in4.3 times.

The least attractive destinations for obtaining investment residency have become Bulgaria and Latvia, where demand has decreased.2.25and4.75times respectively.

Incentives for purchasing real estate

The second most important reason remains the desire to protect oneself from political, economic, and other risks at home — this reason was mentioned.29%participants. Moreover, this motive was mentioned in Spain55%respondents, in Bulgaria and Montenegro — by50%The desire to preserve capital investments turned out to be less common — it was chosen by only21%respondents, that on1.6 timeslower than in 2020. This reason has become most relevant only in Germany, where78%Participants in the survey expressed their intention to preserve their assets.

Conclusion

Ultimately, the desire to increase capital became the least common motive, as it was mentioned by only8%of those surveyed, while in 2020 this figure reached26%These data indicate that the current motives and preferences of Russian-speaking buyers in the real estate market have undergone changes influenced by political and economic factors.

Key trends in the real estate market in Thailand

According to research, more than 67% of respondents in Thailand cited the desire to improve their living conditions as the main reason for purchasing real estate. The average price of housing currently stands at 290,000 euros, which is an 18% decrease compared to 2021 figures.

Issues arising during transactions

The main difficulties faced by deal participants are complicated money transfer procedures and inflated price expectations. According to a survey conducted in 2022, two fundamental reasons were identified that often put deals with Russian-speaking buyers at risk of falling through.

• Unrealistic expectations of customersRegarding prices, 37% of respondents noted this.
• Issues with transferring fundsIn the country where the purchase is made, and it concerns 38% of the survey participants.

Differences in percentages and countries

In different countries, one of these problems usually prevails over the other. It is worth noting that among respondents actively working in markets with a high activity of Russian-speaking buyers, undervalued price expectations become particularly relevant. The study shows that this aspect is also directly related to the interest in obtaining residency for investment purposes and is more frequently observed in countries with less developed economies.

For example:

• In the United Arab Emirates, 100% of those surveyed noted that in 2022, Russian-speaking clients expected significantly lower prices.
• In countries like Thailand, Georgia, and Turkey, the percentage of agreement with this has risen to 83%, 75%, and 72% respectively.

Historical data on underestimated price expectations

In previous studies, price expectations consistently ranked among the top reasons why deals with Russian-speaking clients failed. Issues related to money transfers are most relevant in countries where the activity of Russian-speaking buyers is lower compared to clients from Europe or other regions.

• In Spain, this issue affected 56% of participants.
• In Italy — 50%.
• In Bulgaria and Cyprus, both identified issues emerged at a similar level: 40% and 38% respectively.

Comparison of difficulties by country

The lowered price expectations are most pronounced in those countries where Russian-speaking buyers are most active, while difficulties with money transfers are more often a concern in regions with less activity from this demographic. For example:

• In Germany, the main reasons for deal failures were the banks' refusals to service clients from Russia, according to 71% of those surveyed.
• A similar situation is observed in Spain, where 67% of participants reported a similar issue.

The popularity of online transactions

When it comes to online transactions, their popularity varies significantly depending on the activity of Russian-speaking buyers. It is estimated that only 9% of transactions in 2022 were made online, while in 2021 this figure reached 23%.

Nevertheless, certain countries stand out against the overall picture. Online transactions are more prevalent in those countries where Russian-speaking buyers are most active. For example:

• Respondents from the UAE indicated that the share of online transactions is 50%.
• From Thailand — 44%.

This indicates that, despite general trends, the specifics of the market and consumer behavior can vary significantly depending on regional characteristics.

Conclusion

In conclusion, the survey results confirm a significant increase in the activity of Russian-speaking buyers in the international real estate market, especially in countries where they traditionally make large investments. As key players in this market, our compatriots have had a noticeable impact on price dynamics and demand.

The increase in the number of transactions in countries like Turkey and the UAE highlights that Russian-speaking buyers are eager to find suitable investment opportunities for themselves, indicating a continued interest in foreignreal estate.

Current trends and observations

Observing the current trends, we can confidently say that we will see further evolution of consumer preferences in the near future. It is important to note that in countries where the Russian language is widely used, the activity of Russian-speaking buyers continues to grow, while in countries like the Czech Republic and Bulgaria, there is a decline in interest. This creates a complex picture where:

• Some countriesbenefit from the presence of Russian-speaking investors,
• whileothersthey lose interest in them.

Thus, the dynamics of the real estate market remain subject to changes that will occur against the backdrop of global economic realities. The interest of Russian-speaking buyers will continue to shape trends in the market depending on the political and economic situation both in the host countries and in Russia.

Recommendations for investors

For future investors, it is important to monitor the development of these trends and adapt to new conditions in order to effectively capitalize on emerging opportunities in the international real estate arena.