Foreigners steer clear of moscow real estate

Photo credit: John Leach

Expats made up just 2 per cent of high-end housing in the Russian city in the first six months of 2014, one-fifth lower than the same period last year, reveals data from Kalinka Group.

The evaporation of foreign interest occurs as Russia faces ongoing economic sanctions from the US in the wake of the country's also-continuing conflict with Ukraine.

In the last year, Russia has also made attempts to clamp down on corruption within its economy, notes The Moscow Times, including a ban on foreign bank accounts and ownership of stocks abroad for government officials. This has sapped demand for international real estate, although many still find a way to purchase a holiday home in destinations such as Bulgaria and Turkey.

With property trade across the border down in both directions, officials have instead turned to their own domestic market for investment. While overseas buyers have all but fled Moscow's housing, the number of elite deals sealed by state officals jumped 260 per cent in the first half of 2014 year-on-year, taking the amount of luxury units in the city owned by government employees to one-third.