Russian Elites Sharply Increase Their Purchases of Housing and Business in Europe

Paul Goble

            Staunton, November 16 – In the first months of 2017, wealthy Russians doubled the number of purchases of housing stock abroad, especially near universities for their children, and increased by 600 percent their purchases of existing businesses that they may eventually move to and run, according to a report by Finanz.ru.

            Using figures from the international consulting company Knight Frank, the Russian financial affairs agency says well-to-do Russians are rapidly increasing purchases of property and businesses abroad as a result of Russia’s economic crisis and the deterioration of relations between Moscow and the West (finanz.ru/novosti/lichnyye-finansy/begstvo-rossiyskikh-elit-v-evropu-uskorilos-vdvoe-1008253826).

            But the company’s figures also show that the average amount Russians are spending to purchase housing abroad has fallen 38 percent over the last two years, a reflection of economic hard times at home and more important the fact that Russians ever further down the income pyramid are now working to emigrate.

            The purchases of businesses abroad, Marina Shalayeva of Knight Frank says, clearly indicate that Russian investors are no longer just looking for passive income but rather are focusing on places where they could work themselves. And the purchases of housing for their children suggests they are taking a genuinely long view about the future.

            These figures are significant because they indicate that those Russians who can are now voting with their feet and not planning to return anytime soon or perhaps ever, thereby depriving their country of birth much of the managerial talent and capital it will need to recover from the current economic malaise.