Russian analytical portal Real Estate Indicators irn.ru has made an attempt to create a profile of Russian Buyers of properties abroad in November 2008. Here is the scoop:
"Headlines speak for themselves: From Russia -With Cash, says Wall Street Journal; Russians Snap up Australian Luxury, BBC continues. You're Not Imagining That Russian Buying Spree, New York Observer agrees.
"Wealthy Russians burst into international real estate market and buy expensive properties all over the world.
"The economy slowing down has just made Russians to be even more interested in real estate investing. Overseas Property Professional Magazine states in one of the latest articles that in 2008 Russian Trading System Index (the total of all Russian stocks) has dropped 75% and that makes Russian stocks the cheapest among developing countries.
"The Russian stock market can't be called reliable. Low oil prices are damaging to the business activity indexes in spite of the strong government support. A. Konovalov, the editor-in-chief of the leading Russian foreign real estate portal Prian.ru, comments on this situation saying that in these troubled times people think of a more reliable way of investing their money - in real estate, for example.
"Investing in domestic real estate in Russia is not only costly, but it's risky as well. Analytics believe that real estate prices in the major cities such as Moscow and St. Petersburg are as high as never before, and in some segments there are already more sellers than buyers. Instability of the national stock market along with the fear of falling domestic real estate prices turned wealthy Russians to look for a safe harbor for their investments abroad. A. Konovalov expects that in the future the interest in foreign real estate will only grow in Russia.
Russian investors - who are they?
"It's no wonder that real estate agencies are trying to win this new segment of buyers. The market players are eager to know - who these newly made wealthy Russians are and what kind of properties they are interested in. To tell the truth, this market is hard to classify.
A. Konovalov says that wealthy Russians are mostly interested in high quality properties in London, Cote d'-Azur, Paris, Toscana and New York. Middle class Russians are looking for affordable condos and homes up to EUR 100,000 in Eastern and Central Europe and Near East. As Mr. Konovalov explains, even an average retired person who has rather limited resources can afford to buy a property abroad if he sells his Russian home or condo.
What do they buy?
"A. Konovalov noticed that over the last five years the number of Russians owners of foreign homes or condos has been growing. Russians buy properties abroad for various reasons.
According to the research conducted by Prian.ru, 20% buy in foreign resort areas for vacationing with families. The next 20% are searching for countries to retire to. The whopping 27.5% expressed their willingness to immigrate to the country where they buy real estate. Just 5.4% of the respondents consider owning foreign properties as a symbol of their high social and business status. The rest are buying as investment or for business purposes. Some consider renting the property out, others are hoping for the equity gain while selling later.
As A. Konovalov further reports, Russians mostly buy homes and land. They are less interested in commercial real estate.
The editor-in-chief of Prian.ru states that the number of inquiries from the portal visitors increased by 15% in October 2008. It became 580,000 in comparison with 500,000 in September.
Where do they buy?
"Russians are mostly interested in European real estate as Europe is closer. The number of those who want to buy in more remote places as Egypt or Thailand is relatively small. But their number might increase in connection with lower credit ratings of some Eastern European countries. Prian.ru publishes the top 10 countries that the visitors search for, here they are:
1. Bulgaria - 14.53%
2. Germany - 8.02%
3. Finland - 7.87%
4. Spain - 7.85%
5. USA - 5.19%
6. France - 4.78%
7. Czech Republic - 4.61%
8. Italy - 4.33%
9. Egypt - 3.17%
10. Turkey - 3.00%
"There are also Chernogoria and Greece in the top 15 countries searched. There is a strong interest in Thailand growing. Cyprus seems to be in less demand, it should be seasonal.
"The growing activity of Russian Buyers in the international real estate market is a part of a huge new trend, no doubt about it. The growing prosperity of the country creates new millionaires and billionaires. It develops in Russia, India and China nowadays. The number and diversity of Russian Buyers of foreign real estate will be growing as no barriers can stop people fascinated with wealth."
I've translated this article by A. Bocharov, published by irn.ru in November 2008, from Russian to English for you.
Sincerely, 
Olga Kellen,
"Anything Russian",
English - Russian Translator,
Associate member of ATA,
American Translators Association
Comments(4)