According to the most recent report released by the Central Bank
of Russia (CBR), cross-border transactions into foreign real estate
were more than halved last year. The volume of real estate
purchases abroad plunged by over $1 billion to just $926 million in
2015, compared to $2 billion in 2014. The brutal ruble devaluation
and economic recession in the Russian Federation are the main
reasons behind this steep drop off in overseas property
The Central Bank of Russia has been publishing data on
cross-border transactions for real estate since 2009. Overseas
transfers rose rapidly for the first six years of these reports
before entering anegative spiral amid growing economic and
However, it is worth noting that CBR figures only account for
personal transactions, meaning that most commercial property
purchases are not included because they are commonly set up by
businesses rather than individuals. This important distinction
emerged after Russian buyers changed attitude towards foreign
property: from 2014 onwards, many Russians turned their focus to
commercial property as ameans to preserve capital and earn income
inareliable currency inresponse to the negative economic climate
back home. This is confirmed by Tranio's most recent findings
inthe Russian Buyer Report 2015 according to which overseas
transactions with Russian-speaking clients fell by 50% but
commercial property investments increased by 20%.
Even interms of quarterly transactions, volumes were halved. In
Q4 2015, Russian buyers spent just $219million, compared to
$507million inQ4 2014. This volume was last witnessed in2009 when
Russia emerged from the last crisis with quarterly transaction
volumes of just $217million. Nevertheless, interms of
quarter-on-quarter results, the decline seems to be stabilising,
falling by only 6% between Q3 and Q4 2015.
In 2015, total Russian spending on overseas services and goods
amounted to $24.6billion, half of what was spent in2014
($49.7billion), highlighting the general downwards trend. Most of
the transactions were located inSwitzerland, Latvia, the USA, the
UK and Cyprus. Ukraine has become the leading destination for
cross-border transfers inthe CIS.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Back in Issue 05 of IQ, we examined the decision in Yam Seng PTE Ltd v International Trade Corporation Ltd and looked at whether a general obligation of good faith could be implied into contracts made in accordance with English law.
Ian Mitchell, a partner in the Anthony Gold leasehold services team, answers why investors like to buy freehold properties.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).