While Russian citizens are not the large category of buyers in the Spanish real estate market, Spain itself is the favorite place for wealthy Russians.
Russian citizens take about 4% of the total foreigners number in Spain. These people are mostly either rich Russians or the wealthy middle class. Both categories choose Spain to purchase the "second home" and for direct investments.
Russians made 350 real estate transactions in 2021.
The information above is reflected in reports of the Spanish Institute for Foreign Trade (ICEX) and the Department of Cadastre under the Ministry of Justice of Spain.
Most of 350 transactions are direct investments. This means a real estate purchase for profit.
According to Gerard Marset, the founder of Laborde Marcet - the investment consulting company: “Risks of facing the paralysis of the Russian economy and the inability to withdraw funds with ease abroad grow for those who have significant capital in Russia. This motivates them to invest in foreign assets.” It also involves Spanish real estate.
The sharp increase in the transactions volume from Russia forced local banks to be extremely vigilant and to warn the sector about ongoing financial transactions and potential profit from them.
Spanish real estate is also attractive for wealthy foreign buyers because it provides special visas for investors. This is about the "Golden Visa" for FDI (foreign direct investments) specifically. Investments should be equal to or more than 500,000 euros.
Around 1,000 Russian citizens have already received this visa. 157 visas were issued in 2021 alone. According to ICEX information this is 80 more visas than in 2020.
50% of real estate transactions made by Russian buyers are registered in Valencia autonomous community. At least 25,000 Russians live in this region allegedly.
Valencia is followed by Catalonia autonomous community with 21% of transactions, then Andalusia (13%), Canary Islands (10%) and Madrid (10%).
In Spain the average housing price purchased by Russians is 1,700 euros per m2.
It is important to note that the super-rich buyers from Russia worry not only about the consequences of sanctions, but also about economy changes that follow the rapidly collapsing ruble.
Only increasing in the cost of new real estate construction can scare away Russian capital. This will affect the cost of new properties, which will call into question the “safety” of Spanish real estate as an asset for Russian investors.