Wealthy Russian property buyers are tapering off purchases in Dubai and heading to Southeast Asia, according to experts.
Top destinations include Thailand’s resort areas and the Indonesian island of Bali, according to real estate experts, as Russian buyers flock to tropical havens offering sanctuary from the political and economic turmoil back home.
This shift comes amid a decline of Russian investment in Dubai’s luxury property sector over the past six months. “The initial rush of investments from Russian and other former Soviet state nationals has significantly tapered off, as many who intended to invest in Dubai have already done so,” said Lynnette Sacchetto, founder of Dubai-based consulting firm DXB Advisors.
During the first half of 2021, Russians were among the top 10 nationalities of foreign investors in Dubai’s property market with investments exceeding AED 1 million. This trend then gained greater momentum in 2023 when it reached its peak as Russians flocked to Palm Jumeirah, Downtown Dubai, and Dubai Marina for ready-to-move-in properties.
According to Sacchetto, economic factors such as the depreciation of the Russian Ruble and international sanctions have adversely affected the purchasing power of these nationals, complicating their ability to invest overseas.
“These factors combined have led to a notable decline in new investments from Russians,” she added.
Despite the exodus of Russians, Dubai’s real estate market is thriving as the world’s wealthy continue to flock to the emirate for its luxury properties which are still relatively affordable compared to other major real estate hotspots like New York and London.
A recent report found that Dubai has become the world’s busiest market for luxury properties priced over $10 million. This comes as new research suggests the market recorded a staggering $1.7 billion in sales for $10 million-plus homes during the first quarter of 2024.
Pattaya property boom
Many Russian buyers priced out of Dubai are now setting their sights on Thailand’s eastern seaboard. “Russians accounted for approximately 12 percent of all foreign real estate purchases in Pattaya in 2019. They also made up approximately 10 to 15 percent of foreign property purchases in resort areas during this time,” said Sacchetto, citing data from the Thai Real Estate Association.
Russians’ share Phuket’s property market has skyrocketed even further since the start of the Ukraine war, now accounting for 40 percent of all condominium owners.
“This has not only influenced property prices but also the local economy and business landscape. It is reshaping the market dynamics, driving prices up, and impacting the local socio-economic environment,” she added.
The influx of Russian money has pushed condominium prices higher across Thailand. The national Housing Price Index for condominiums reached a peak of 198.9 in December 2023, up 2.7 percent from November 2023.
Experts say demand from Russian buyers has been a primary driver of price growth. “Since the start of the Russian-Ukraine conflict, Russians have flocked to Thailand as a safe haven and low cost of living,” said Sacchetto.
Island living
In neighbouring Indonesia, Bali has also emerged as a magnet for Russians seeking sanctuary. While Bali trails Pattaya in terms of Russian ownership, the island’s property market seems to be rapidly transforming.
“Russian investors accounted for around 3 to 5 percent of foreign property transactions in recent years,” according to Sacchetto. “The average investment ranges from $200,000 to $500,000, primarily targeting villas and residential properties in areas like Seminyak, Canggu, and Ubud.”
Bali saw 5.23 million tourist arrivals in 2023, setting the stage for a potential property boom. Arrivals were dominated by Australians who accounted for 25 percent, followed by tourists from India, mainland China, the UK, US, South Korea, France Singapore, Germany and Malaysia.
“Bali aims to attract about seven million tourists in 2024,” said Sacchetto. With Russians among the top foreign nationalities buying property on the island, the influx shows no signs of slowing.
Changing lifestyles
Behind the buying binge lies a longing for simpler tropical lifestyles, Russian expats say.
“Bali or Thailand is more like a tourist spot, places where you can have a good vacation, or live a cheaper life,” said Dubai-based comedian and influencer Stefania Totolo, who noticed many of her Russian friends and acquaintances move to these destinations over the past few months.
However, for Russians like Totolo seeking fame and fortune, Dubai still retains its allure as a global hub. “It is [still a top destination], especially for those who want to grow in their careers, or who have a business here,” she said.
Island sanctuary
For Russians focused on lifestyle over career, Bali offers an idyllic sanctuary. “I just had an unambiguous desire – wintering in Bali. No other options,” explained Ekaterina Polumordvinova, COO at Pike Media, who recently spent time on the island.
“I wanted to try exactly the format of life on a small island, where you have access to a lot of options for different activities. Plus, it seems to be a more diverse and concentrated community, everything is conveniently located in terms of neighbourhoods and options for adjusting the lifestyle.”
While Polumordvinova noticed a high concentration of Russian speakers, she said the island attracts a diverse mix of foreign tourists year-round. “For example, in the season when there are fewer tourists from Russia, more tourists come from Australia. So it feels like there is always the same demand here.”
For wealthy Russians seeking safe harbour amid political and economic uncertainty, the appeal of Thailand and Indonesia’s tropical shores continues to grow.
With this new wave of buyers, Asia’s island paradises are becoming ever more populated by Russian speakers looking to start fresh.
*Arabian Business Russian‘s Dmitrijs Zujevs contributed to this article
Follow us on
