Russians have their eyes on European real estate
With prices falling for real estate, Europe has become a popular and significant place for Russians to start buying up and now account for a large portion of real estate buyers.
Since the early 90s, people around the world have been touting the term “The Russians are coming.” Their wallets fattened by oil and gas revenues, the so-called “new Russians” seemed to have been moving into a house near you.
In reality, this wasn’t really the case, but in 2009, despite the downturn, demand for European property among Russians increased significantly.
According to European real estate agencies, last year Russians bought 41% of real estate in and around Paris, Berlin and Rome. And the amount of Russian buyers in London rose by 25% in the same period says Ekaterina Thain, Partner and Director of Residential at Knight Frank
“Russians have been significant players on the international markets for the last 3,4 or maybe 5 years and definitely we have seen an serious uplift in 2009 when the crisis in Russia just started.”
Russians now account for almost half of the buyers in Europe, not only because demand among Europeans has dropped since the recession began, but also because prices have come down. Experts also note the buyers' preferences have shifted.
“What we noticed was if before the crisis lots of people would buy on the new markets – for example like Bulgaria, Turkey, Egypt, lots of new key areas, which were booming in terms of development – after the crisis there was a huge decrease in demand for such places, because people would prefer to invest into the classical markets,” Thain says.
Moscow – with its consistently high prices – discourages many Russian buyers who have the cash, shifting their focus to the European capitals, and younger Russians are more inclined to do this says Stanislav Zingel, President of international real estate agency, Gordon Rock.
“There is a new generation coming, a generation that is looking for good education, for good opportunities, who have been a number of times in these countries, and whatever crunch or not, want to invest, they have money to invest and they understand that today is a good opportunity so, why not?”
Russians have long been stigmatized with phrases such as “The Russian Invasion”, when really only rich could afford such purchases.
But the crisis, which hit Europe particularly hard, is presenting new opportunities with many more Russians now looking beyond the border in search of a good place to invest – and finally putting a bit of justice to the term, “The Russians are coming”.