Wealthy Russian property buyers are reducing their purchases in Dubai and heading to Southeast Asia, according to experts.
Key destinations include Thailand’s resort areas and the Indonesian island of Bali, as Russian buyers seek refuge from the political and economic turmoil back home.
This shift follows a decline in Russian investment in Dubai’s luxury property sector over the past six months. Lynnette Sacchetto, founder of Dubai-based consulting firm DXB Advisors, stated, “The initial surge of investments from Russian and other former Soviet state nationals has significantly diminished, as many who planned to invest in Dubai have already done so.”
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 1M. This trend peaked in 2023 as Russians flocked to Palm Jumeirah, Downtown Dubai, and Dubai Marina for ready-to-move-in properties.
Sacchetto attributed the decline in Russian investments to economic factors such as the depreciation of the Russian Ruble and international sanctions, which have impacted their purchasing power and ability to invest abroad.
Despite the Russian exodus, Dubai’s real estate market remains robust, attracting wealthy individuals globally due to its relatively affordable luxury properties compared to other major real estate hubs like New York and London.
A recent report revealed Dubai as the world’s busiest market for luxury properties priced over $10M, with sales surpassing $1.7B in the first quarter of 2024.
Many Russian buyers priced out of Dubai are now turning to Thailand’s eastern seaboard. Sacchetto noted that Russians accounted for approximately 12 percent of all foreign real estate purchases in Pattaya in 2019 and a significant share of property purchases in resort areas.
The influx of Russian capital has driven condominium prices higher across Thailand, with demand from Russian buyers being a primary driver of price growth since the onset of the Russian-Ukraine conflict.
In neighbouring Indonesia, Bali has also become a magnet for Russians seeking sanctuary. While trailing behind Pattaya in terms of Russian ownership, Bali’s property market is rapidly evolving, attracting investors with average investments ranging from $200,000 to $500,000 in areas like Seminyak, Canggu, and Ubud.
With Bali aiming to attract around seven million tourists in 2024 and Russians among the top foreign nationalities purchasing property on the island, the trend shows no signs of abating.
The surge in property purchases in Thailand and Indonesia reflects a desire among Russian expats for simpler tropical lifestyles, away from the political and economic uncertainties of their homeland.
Despite the allure of Bali and Thailand, Dubai retains its appeal as a global hub for Russians focused on career growth and business opportunities. However, for those prioritising lifestyle over career, Bali offers an idyllic sanctuary, attracting a diverse mix of foreign tourists year-round.