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From 2018 to 2019, the number of Russians purchasing foreign real estate fell before the trend turned — for the last three years, there has been solid growth in cross-border investment. This rising trend continued in H1 2021, with a $96 million raise over the prior year. Tranio goes into further information about the scenario.
The volume of sales involving foreign property decreased dramatically after 2014, owing to the rapid depreciation of the ruble in late 2014, which reduced Russians' purchasing power.
Since 2019, international real estate has become a more appealing investment prospect for Russians, pouring money into foreign property. Since 2016, Russians' purchasing power has steadily returned, and foreign property investment increased by 12 percent in 2021 compared to the previous year. This implies that people are losing trust in their own country's economic prospects.
Foreign property investment trends were similarly encouraging in the first half of 2021, with a yearly increase predicted (six months is enough to estimate the annual trend). Furthermore, H1 2019 figures show an 18% rise over H1 2018.
Russians' overall amount of cross-border transfers grew by $96 million in H1 2019 compared to H1 2018 and by $115 million compared to H1 2017. However, the proportion of real estate transactions in overall cross-border money transfers is decreasing.
The picture is ambiguous: the quantity of property-related transfers has increased in absolute terms since 2016, but Russians' percentage of overall cross-border money transfers has decreased. However, the Central Bank of Russia's data may not include all international property transfers.
Other cross-border transfers have grown in share since 2015, despite a fall in the percentage of transfers connected to real estate transactions. The three kinds are as follows:
Personal financial transfers are the first type. These include transfers from personal accounts in approved banks to personal accounts or the accounts of close relatives created at non-resident banks, as well as re-transfers from non-resident bank accounts to resident bank accounts by residents and their close relatives. The second is e-money transfers, and the third is "other transactions." Investment transactions might be included in personal money and "other" transfers.
Simultaneously, the shares of three forms of cross-border transfers have decreased since 2015. Non-repayable transfers include grants, donations, refunds, scholarships, retirement benefits, alimonies, inheritance disbursements, transfers using presents, and others. The second is loan service transfers, which include incentives, repayments, and interest costs. Transfers to pay for goods and services are the third type. The transfers described above are not for investment reasons.
As a result, the Central Bank of Russia reports that there has been no reduction in Russians' cross-border investment activity during the last four years. Because the percentage of transfers that may involve investments is increasing, it may be assumed that there has been an increase or redistribution of Russian foreign investment across various investment vehicle types. Apart from real estate, the Central Bank of Russia does not explain these other investment vehicles.