About 30% of investments in Russian real estate in 2023 accounted for transactions with assets of outgoing foreigners. This year, this figure may fall to 15%. The share of transactions with foreign sellers in the first quarter of 2024 was only 6%
The share of investments in real estate in Russia with foreign sellers by the end of 2024 may amount to 15-18% against 30% last year. This forecast of RBC-Real Estate was announced by Sergey Vladimirov, head of the IBC Real Estate branch in St. Petersburg.
The total volume of investments in Russian real estate by the end of 2024 will amount to 400-450 billion rubles, of which the share of transactions with foreign sellers will be at the level of 15-18% (about 60-81 billion rubles), IBC Real Estate predicts.
The trend towards the exit of foreign sellers, which began in 2022, is now on the decline, Sergey Vladimirov notes. “In 2024, we will see deals that will be concluded with foreigners. But this trend — buying at a discount from foreigners — will no longer be decisive in the real estate market over the next two to three years,” the expert believes.
Last year, the total volume of investments became a record in the entire history of the market and amounted to 859 billion rubles, of which almost a third (about 256 billion rubles) accounted for transactions with foreign sellers who left Russia. “2023 was remembered for a huge number of transactions related to the departure of foreign owners. According to our analysts, about 30% of the total investment volume last year was accounted for transactions with outgoing foreigners,” the head of the IBC Real Estate branch in St. Petersburg said at the conference.
What will affect the mood of investors
In addition to foreign owners, the dynamics of investments will be determined by the cost of lending due to the key rate, Sergey Vladimirov continued. Currently, lending is at a low level due to the high key interest rate. But in the second half of the year, with the projected reduction in the Central Bank’s rate, investor activity will begin to grow, he believes.
Among the factors that can have a positive impact on real estate investments, he named the repatriation of Russian capital. “If earlier Russian businesses made profits and reinvested it abroad, now we see the opposite process — a large number of investors drove money into the country. From my point of view, this is a good prerequisite for further growth of investments in Russian real estate, which helps to preserve and increase capital,” he explained.
Photo: IBC Real Estate
Investments are on the decline after a record
According to IBC Real Estate calculations, according to the results of the first quarter of 2024 (as of March 12), the volume of investments in Russian real estate amounted to 78 billion rubles, which is 44% lower than the same period last year. As RBC-Real Estate clarified in the company, the share of transactions with foreign sellers in the first quarter was only 6%.
The main volume of investments in real estate fell on Moscow — 77% of investments. About 15% of investments were in St. Petersburg, the rest in other regions, said Sergey Vladimirov.
Residential real estate (development sites) became the leading segment in terms of investment in the incomplete first quarter. It accounted for 32 billion rubles of investments (about 41%). The second place in terms of investments is occupied by warehouses, in which about 15 billion rubles were invested. (19,2%). Office real estate is in third place, accounting for about 14 billion rubles (17.9%). Investors invested another 9 billion rubles in hotel real estate, 8 billion rubles. — to shopping facilities.
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