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Russian investment overseas has wobbled this year, following the weakening of the ruble.
The country was once a dominant force in global real estate, snapping up prime property in the UK, particularly in London, and breaking the sales record for an apartment in Manhattan, after the daughter of billionaire Dmitry Rybolovlev splashed $88 million on a condo in 2011.
Now, though, the mother nation of the wealthy markets is beginning to crumble, as the economic sanctions from Western countries, in response to the Ukraine situation, impact the Russian economy. Combined with a fall in the price of oil, Russia’s economy has stalled, causing the ruble to plummet 40 per cent against the US dollar last year.
The weakened currency has severely dampened spending power for Russians looking to invest overseas. Indeed, Brits and Americans have both stepped up their activity significantly in recent months, as the strength of the dollar and pound against the euro has boosted how far their coin can go on the continent.
According to data from the Central Bank, published by The Moscow Times , Russian spending on overseas real estate fell 42 per cent in the first three months of 2015 year-on-year: $281 million was transferred abroad between January and March this year, compared to $484 million in the same period in 2014.
“Demand for purchasing property abroad dropped especially sharply at the start of 2015 due to the sharp ruble devaluation in the end of last year. People were discouraged and delayed purchases,” Georgy Kachmazov, head of estate agency Tranio, said in a statement.
In 2014, Russians investors around $2.05 billion in foreign real estate, down from $2.15 billion in 2013, a decline that reversed several years of growth since 2009.