According to Tranio, in the first quarter of 2024, the total demand of Russians for buying real estate abroad decreased by 10.7% compared to the same period last year, but demand continues to grow in certain areas. At the beginning of the year, the interest of Russian buyers in real estate in Southeast Asia increased: in particular, Thailand (95.8% increase in applications) and Indonesia (+5.5%).
Residence permit programs for investments remain the main driver of demand in European markets, and in New centers of attraction for international capital are emerging in the Middle East.
Top 10 countries popular with property buyers from Of Russia
№
Direction
The share of applications, % of the total
Demand dynamics, % year-on-year
Median budget
1
Thailand
17,3%
+95,8%
$151 000
2
Georgia
13,1%
—6,7%
$107 000
3
UAE
8,6%
—25,8%
$256 000
4
Greece
7,7%
+6,9%
$268 000
5
Turkey
6,8%
—27,5%
$297 000
6
Spain
6,6%
—12,0%
$428 000
7
France
5,6%
—12,1%
$428 000
8
Indonesia (Bali Island)
3,8%
+5,5%
$206 000
9
Cyprus
3,5%
—15,4%
$375 000
10
Germany
2,2%
—8,5%
$428 000
All directions
100%
—10,7%
$282 000
The key trend The first quarter of 2024 is a strengthening of Russian demand in the Thai real estate market, which directly correlates with an increase in tourist flow during the winter season. This year, Thailand has become the most popular destination for mass tourism among Russians, and in terms of the number of arrivals from Russia has reached a record high.
According to Tranio, last year, Russian clients were most active in such destinations as Phuket (57% of applications for the purchase of real estate in Thailand), Pattaya (15%) andKoh Samui (9%). The demand for real estate is exclusively for Phuket and on Koh Samui grew by 13 and 8%, respectively. In Pattaya, demand growth slowed by 10% after a record inflow of investments in 2022, although in 2023 this region still remained in second place in terms of the number of applications. In 2023, the predominant goal remains the combination of rental and recreation (56% of applications), the share of purely investment requests has increased significantly: 3.4% of applications for resale in 2023, whereas in 2019-2021 there were no applications for such a purpose.
The number of purchase requests and transactions remains high at the moment, as many tourists who have familiarized themselves with the offers on the local market during their vacation make the final purchase decision upon returning home. In Thailand, there are no difficulties with bank transfers from Remote real estate transactions are widespread in Russia. Bali also saw a slight increase in purchase requests at the beginning of the year, but not in the same volume as in Thailand. This is a consequence of the lack of direct flights from Russia and the generally lower season there.
With the growth of investment transactions among Russian buyers, the average check decreased. According to Tranio, the median budget for real estate transactions in In Thailand, at the end of 2023, it decreased by 23% compared to 2022 — to 150 thousand dollars, and in In the first quarter of 2024, it remains at a close level of 151 thousand dollars. The most noticeable decrease was recorded at Phuket (-25% relative to 2022), where buyers prefer service apartments in popular resorts. The largest share of transactions with a high check falls on Koh Samui where the median budget of Russian buyers reached 257 thousand dollars. In this region, customers are more likely to consider buying villas. A significant share of foreign demand in Thailand is generated by investors from China, who prefer investments in rental housing in the mass segment in Bangkok and in the resorts of Pattaya.
Bali real estate continues to gain popularity in the Southeast Asian region: This island accounts for the vast majority of purchase orders in Indonesia, which increased by 5.5% in the first quarter of 2024. According to Tranio’s observations, last year Indonesia entered the top 10 countries popular with Russians for the first time, and by the end of January-March it rose to the 8th position of the rating with a share of 3.8% of the total number of applications. Other countries in this region are also becoming more in demand among Russian buyers. So, according to the results In the first quarter of 2024, the growth of applications for the purchase of real estate in Vietnam amounted to 43%, and the median budget reached 197 thousand dollars. The activity of Russians in this market is also noted by other market participants, including the Vietnamese resort of Da Nang among the popular destinations along with Phuket and Bali.
Real estate in Europe with a residence permit: the rise of Greece
The demand of Russians for European real estate in early 2024 is still largely determined by the available investment residence permit programs. In the first quarter of 2024 the selection of real estate for the purpose of obtaining a residence permit or passport accounted for 23% of all applications from Russians against 35 and 37% of applications in 2022 and 2023, respectively. Thus, we can talk about a slight decrease in the importance of this factor, but it still remains one of the leading ones. Russians can apply for a residence permit or passport based on real estate investments in most of the top 10 countries, but in European countries the proportion of applications for a residence permit is on average higher than in the UAE, Georgia and Thailand.
In Spain(6.6% of applications) Russians can still get a “golden visa” for the purchase of real estate in the amount of 500 thousand euros, and for Cyprus (3.5% of applications) — apply for permanent residence when investing in new buildings from 300 thousand euros. It is currently impossible to apply for a “golden visa” for Greece (7.7% of applications) directly to a passport of the Russian Federation or Belarus, but registration for passports of other CIS countries is available. Tranio’s Russian clients, who have a second passport or the opportunity to get one this year, are now still considering the Greek program for a budget of 250 thousand euros, while the rest are already focusing on offers in Spain in a budget of 500 thousand euros.
The Greek “golden visa” program is actually being closed: in the main areas that are popular with foreign investors, the limit on the value of real estate for a residence permit will be increased to 800 thousand euros, which is a protective tariff. In recent months, many investors have been trying to make a deal and get a residence permit on current terms, which caused an increase in the number of applications for the purchase of real estate by 6.9% compared to the first quarter of last year.
Among the changes in the ranking of popular countries, it is worth noting the return to the top 10 of Germany, which accounted for 2.2% of Russian applications in the first quarter of 2024. Although it is impossible to apply for a residence permit in Germany based on the purchase of real estate, this country has traditionally been in demand among Russians who purchase housing for relocation. A new incentive for planning a move is provided by recent changes in the German citizenship law, which allow immigrants to apply for a passport after 5 years (previously — after 8 years) and at the same time not give up their first citizenship regardless of the country of origin (previously — for EU citizens). It is expected that against the background of these fundamental changes in legislation, Germany may experience a new influx of migrants, which will also affect the demand for housing.
Dubai and Turkey are being squeezed by Middle Eastern neighbors
In 2023, the first line in the ranking of countries popular with Russians was invariably occupied by the Arab Emirates, but for January-March 2024, the number of applications in the UAE decreased by a quarter (-25.8%). The continued price growth in the Dubai market is contributing to the decline in the popularity of this country, along with the emergence of affordable alternatives in the region: investment projects in Qatar, Oman, and Saudi Arabia. So, in the first quarter of 2024, Tranio noted an increase in Russian demand for real estate in Saudi Arabia (an increase in applications by 121%) and Qatar (an increase by 232%). At the same time, the general trend in the UAE market remains upward. According to DLD (Dubai Land Department), in February 2024, the number of transactions in the Dubai new building market increased by 39.4% by February 2023.
Russians’ interest in The Persian Gulf is due to the experience of investing in the UAE market, where in previous years customers received attractive returns due to the increase in the cost of a meter, as well as growing rental demand. Now the market growth in the UAE continues, but has slowed down compared to 2022, and investors are counting on capital growth opportunities in the markets of neighboring countries, which have relatively recently opened to foreign buyers and are striving to repeat Dubai’s success in attracting international capital to development and tourism.
In January-March 2024, Russians’ interest in Turkish real estate also decreased: according to Tranio, the number of purchase applications decreased by 27.5% compared to last year. At the same time, Russian citizens are still the most active foreign buyers of real estate in Turkey. According to official statistics from TUIK, in January-February, Russians purchased 950 real estate properties in this country, which is noticeably lower than the peak figures of the beginning of 2023. In the long term, the demand of Russians has even increased: for example, in comparison with January-February 2021, the number of purchases from Russian citizens increased by more than 83%.
The cooling of interest in Turkish real estate is associated with refusals to issue a residence permit, although most often it was about applications for a tourist residence permit based on renting, rather than buying real estate. Restrictions for owners arose after raising the threshold for the cost of housing under a residence permit to 200 thousand dollars against the previously established mark of 50-75 thousand dollars, valid until October 2023.
This type of residence permit can be applied for after obtaining a tapu certificate (ownership rights), which in Turkey is issued not only for finished real estate, but also for objects under construction from a certain stage. Last year, market participants recommended that customers interested in a residence permit apply for tapu and A residence permit when such an opportunity arises, without waiting for the delivery of the object. Unfortunately, not all owners made such a decision or managed to submit an application before the minimum threshold was changed. At the same time, the requirements for the value of real estate for participation in the Turkish Golden Passport program have not changed since 2022: the starting threshold for participation is 400 thousand. Dollars.
As an alternative to Turkish investment citizenship, a similar program appeared in Egypt last year: in this country, investors who purchase real estate in the amount of 300 thousand dollars or more can apply for a passport. According to Tranio, the launch of the program led to an almost threefold increase in purchase orders during 2023, but at the beginning of 2024, high activity of Russians in this market was not noted.
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