WHERE HAVE THE RUSSIANS DISAPPEARED TO?
The biggest trending realty news story in recent times, known to most of the real estate agents and developers in majority of the Thailand’s realty hot beds is that the Russian buyers and investors are nowhere to be seen.
Post the Ruble crash the investors from CIS countries have all withdrawn from the Kingdom of Thailand. This is backed up by the data collected by Tranio an international real estate broker. According to Tranio, the budget of actual investors also dipped by 67%, leading to a 20% overall loss of budget in Thailand.
Thailand is now labeled to have land in the ‘medium’ price category sandwiched between Spain and the Czech Republic as per the preliminary research conducted in 2015. As per the reports submitted in 2014, Thailand along with Bulgaria and Turkey are viewed as ‘low’ priced countries.
The trend noticed in 2014 was that half of the Russian-speaking property buyers rented out their real estate, expecting a 10% yield or more in Thailand. What is more worrying for Thailand’s property and real estate industry is the sudden decline in the online search by 27% year after year in 2015.
George Kachmazov from Tranio was reported as saying that Russia’s generation next along with CIS buyers have now shifted their focus to cheaper real estate markets as compared to more expensive locations, which explains why some Russian buyers would still invest in Thailand.
Mr. Kachmazov also said that they were still receiving enquires and did make some sales this year, but there has been a decline by about 50 percent which is correlated to the ruble crash. Property can be bought only in dollars and Thai baht while the Russians are earning in rubles which is the main reason for the decline in buyers in 2016 post the ruble crash.
Trying to overcome the risk related to the Russian market and diversify away from the local market, there are more buyers for commercial property in Thailand. To keep the Russian buyers active in the coming year the Russian-Thai agencies and developers will need to focus on buy-to-let schemes.
George was also reported as saying at one of his conferences that Russian’s more often than not buy property-to-let in the same locality as their own private home as most of them do not have time to look after their foreign realty investments and are invariably attracted to investment schemes. He concluded the conference by advising the local sellers to look back at the previous clients from Russia and offer them investment property options. Lastly he said, don’t sell added-value projects, a rental property with 5 percent guaranteed income per year might seem more attractive.
Keyphrase: Ruble crash