REUTERS/Maxim ShipenkovFor many Russians, the door may be closing on London's high-end property market.Russian buyers are flooding out of London's property market, according to an amazing Bloomberg piece.
Sanctions, bank limitations on withdrawals and the shattered ruble are killing Russian demand for luxury London housing. All but the most wealthy Oligarchs are getting hit by the country's crisis, according to the article:
The number of Russians registered through Christie's International Real Estate to buy homes in the city dropped by 70 percent in a year, said Giles Hannah, the broker's senior vice president. That has led to a plunge in offers for properties priced at less than 10 million pounds ($16 million) as it becomes more difficult for all but the wealthiest to take money out of their home country.
"The banks are limiting what they can withdraw and we're expecting further impact as sanctions kick in," said Hannah, who advised Russian families on 180 million pounds of London property deals in the past two years. "The oligarchs are still spending. They already have banks or lawyers over here that allow them to make purchases."
The London property market has already slowed down: According to the Office For National Statistics, prices in London were up by 17.2% in the year to October. That's actually a drop from the increases seen earlier in the year. However, most analysts aren't putting that down to fewer Russian buyers.
The ruble has now declined to such an extent that buying property in another currency, like sterling, is around twice as expensive as it was at the beginning of the year. Ordinary Russians are queueing up to get hold of dollars, and panic-buying in stores.
Some real estate experts are even more unequivocal about the disappearance of Russian buyers from the market. This from Bloomberg again:
Russian buyers have been "eliminated virtually overnight," Andrew Langton, chairman of luxury-property broker Aylesford International Estate Agents, said by phone. "Those that are still here have money out of Russia and won't be taking it back in a hurry."
Russian buyers had previously been the biggest international market for London property, but they've been supplanted this year by French and Italian purchasers. If the trend continues, Russian buyers are likely to fall well behind a lot of other countries too.