In 2022, Russians will invest in resort real estate in Asia and new buildings in the Middle East

В 2022 россияне инвестируют в курортную недвижимость Азии и новостройки на Ближнем Востоке

Tranio summed up the preliminary results of 2022 based on data on the demand of Russians and CIS clients for foreign real estate for 11 months. During this period, the Top 10 promising destinations with growing demand are dominated by the countries of Asia, the Middle East and Eastern Europe.

1. After the pandemic, the demand of Russians for resort real estate has increased

In 2022, Russians invested more actively in resort real estate in Asia and the Middle East amid the recovery of the tourism industry after the global pandemic. The top promising regions with the most significant growth in consumer interest over 11 months included the UAE (demand increased by +327%), Indonesia (+302%), Thailand (+295%) and Turkey (+278%).

Tranio’s statistics on purchase goals in 2022 indicate that buyers from Russians often choose real estate in these countries specifically for investment purposes. For example, more than a third of applications for facilities in Dubai (36%) are for rental properties and new buildings for resale. The main demand in Indonesia (65%) and Thailand (38%) is for resort properties suitable both for their own holidays and for rent. Turkish real estate is of interest to Russians for obtaining a residence permit or passport and subsequent resale (50%), while under the terms of the Turkish investment citizenship program, foreign owners must own real estate for at least three years, during which the objects are most often leased.

Dubai rental real estate now provides the highest returns for investors — on average from 5 to 10% per annum in various formats and price segments.

In Istanbul, this figure is about 4-6% for new buildings and premium service apartments. In this respect, the Istanbul market is not inferior to major European cities such as Berlin or Athens, where investors can also expect rental yields of 4-5% per year.

В 2022 россияне инвестируют в курортную недвижимость Азии и новостройки на Ближнем Востоке

The purchase of housing in the UAE and Turkey for relocation was relevant for 16% and 15% of customers who submitted applications for facilities in these countries from January to November 2022. A little more clients identified the move as the purpose of buying real estate in Thailand and Indonesia — 22% and 19%, respectively. This is a low figure compared to European countries, which are traditionally more popular among Russians as a destination for relocation: for example, this year 54% of Tranio’s clients interested in this country were looking for real estate in Germany for the purpose of moving, and in the Czech Republic the same figure was 50%. The share of moving among Russian buyers of real estate in Israel is high — 50%.

Resort facilities in the south of Europe are also in demand among Russian buyers: for example, 36% of customers interested in Montenegro in 2022 were looking for vacation properties in this country, in Italy — 34%, and in Croatia — 28%. However, none of the European countries entered the top 10 regions with growing demand from Russians, where Asian destinations are now leading: vacation properties in Sri Lanka were requested in 35% of applications in this country, in Georgia – in 33%, and in In Thailand — in 25% (over 38% of requests for the purchase of Thai real estate for both leisure and rental).

В 2022 россияне инвестируют в курортную недвижимость Азии и новостройки на Ближнем Востоке

Among the most popular countries, the highest median budgets in 2022 were recorded for real estate applications in France (450 thousand euros) and Germany (350 thousand euros), as well as in the UAE, Italy and Cyprus — 300 thousand euros each. Of the “high—budget” regions, the largest share of applications is in the Emirates – 10% of Tranio’s clients considered real estate in this country. The position in the rating has also increased for real estate in Cyprus: 5% of clients from In Russia, at the same time, buyers choose objects here for a budget of 300 thousand euros.

The popularity of Cyprus is due to the fact that the country has not limited the participation of Russians in the residence permit program for investments, offers more convenient conditions for bank transfers from the Russian Federation and tax incentives for business development.

A significant plus also remains a comfortable climate in all seasons of the year and the possibility of integration into the already established Russian-speaking expat communities.

2. Russians invest more actively, but on a smaller budget than their neighbors in the CIS

In the first 11 months of 2022, the demand of Russians for foreign real estate increased more than in most other CIS countries — by 89%. According to this indicator, Russia was surpassed only by Moldova, from where Tranio received 2 times more purchase orders during the same period than a year earlier. Demand increased almost equally in Armenia and Kyrgyzstan — by 43% and 44%, respectively.

Demand from customers from Tajikistan and Azerbaijan decreased by about a quarter, but it is buyers from these countries who have the largest median budget among the CIS countries — 356 and 300 thousand euros, respectively. According to this indicator, buyers from Russia is in 7th place among its CIS neighbors with a median budget of 225 thousand euros.

В 2022 россияне инвестируют в курортную недвижимость Азии и новостройки на Ближнем Востоке

3. Four regions of Russia surpassed Moscow in terms of the median budget

By regions of Russia, the largest share of requests for the purchase of real estate abroad falls on Moscow (44.6%), St. Petersburg (10%) and Krasnodar Territory (4.9%). Among the top 10 regions with the most active demand, Muscovites are also leading in terms of the median budget – for 11 months of this year it amounted to 300 thousand euros. According to Tranio, investors from the Russian capital were ready to invest up to 20 million euros in foreign real estate as much as possible during the same period.

В 2022 россияне инвестируют в курортную недвижимость Азии и новостройки на Ближнем Востоке

Buyers from some regions of Russia allocate on average larger budgets for the purchase of real estate abroad than Muscovites. These regions include the Chelyabinsk Region with a median budget of 400 thousand euros, the Altai Territory (381 thousand euros), the Samara Region (380 thousand euros) and the Primorsky Territory (303 thousand euros). And for real estate buyers from the Khanty-Mansiysk Autonomous Okrug, the median and maximum budgets are comparable to those in Moscow.

Top 5 regions by median application budget in 2022

The top 5 most popular destinations among Russians are Turkey (24% of requests), the UAE (10%), Georgia (9%), Spain and Greece (8% each).

Top 5 destinations with the highest growth in Russian demand: UAE (+327% for the year), Indonesia (+302%), Thailand (+295%), Turkey (+278%) and Egypt (+178%).

The goals of Russians’ purchases in regions with growing demand: 1) investments in rental real estate in Asia (Thailand, Indonesia, and Georgia), 2) investments in the Dubai new construction market; 3) purchase of real estate in Turkey for a residence permit and for resale.

In Russia, the median budget for the purchase of foreign real estate amounted to 225 thousand euros, according to this indicator, Russians are in 7th place among buyers from the CIS.

In Moscow, the median budget amounted to 300 thousand euros, while 4 regions of the country are ahead of the capital in this indicator.

The top 5 regions of Russia in terms of demand for foreign real estate: Moscow (45% of requests), St. Petersburg (10%), Krasnodar Territory (5%), Krasnoyarsk Territory (4%) and Tatarstan (3.5%).

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The region of Russia

Median budget, 11 months 2022

Maximum budget, 11 months 2022

1

Chelyabinsk region

€400 000

€1 427 000

2

Altai Territory

€380 600

€ 951 000

3

Samara region

€380 000

€3 000 000

4

Primorsky Krai

€303 000

€1 000 000

5

Moscow

€300 000

€20 000 000

Khanty-Mansiysk Autonomous Okrug

€300 000

€19 218 000