The countries of the European Union have recently agreed to tighten the policy of issuing visas to the EU countries for Russians. This will undoubtedly make it more difficult for Russians to enter the union’s countries and significantly raise the cost of this type of registration. However, this agreement will not only affect the Russians but will also be a blow for countries like Spain, whose economy partially relies on a steady inflow of foreign investment. This is especially true for sectors such as tourism and real estate.
Russians have risen to the top of the Spanish residential real estate market in recent years, mainly in the segment of homes worth a minimum of 500 thousand euros. Moreover, the Russians spent 500 thousand euros to purchase more than 2,000 housing units between the years of 2012 and 2021. As a result, Russian buyers topped the list of international buyers of luxury real estate in Spain.
Following Russian citizens in second place, the British have an enormous separation from other participants in the rating. They acquired only 1,100 premium houses during the specified period. Chinese, Swiss, and Norwegian buyers rounded out the top five.
According to Spanish market experts, the key factor for the wealthiest Russians’ decision to purchase luxury residences in Spain was the fact that they could obtain a residency visa in the country for €500 thousand euros of investment in local properties. This is the so-called “Golden visa”. The Russian citizens received around 24% of all residency permits granted for real estate investment between 2013 and 2020. Information from 2020 provided by the Spanish Institute for Foreign Trade (ICEX) showed that they lost only to Chinese nationals.
Effects on tourism
The Spanish tourism industry will also experience a huge hit, in addition to the elite residential real estate market. According to available estimates Spain will lose more than 935,000 Russian tourists this year and more than 83 million euros in revenue from the summer vacation season (note: May-October 2022). The sanctions brought on by the tense situation in the world are mostly to blame for this decline.
The busiest travel period for Russian tourists has traditionally been from May to October. According to the Spanish National Institute of Statistics (INE), over the same time period in 2019, a total of 937,000 visitors came to Spain from the Russian Federation.
The usual places of interest for Russian tourists were the Spanish regions of the Levant and Andalusia. More precisely, it is about the Costa Dorada, the Salou area, the Costa del Sol, and the Marbella area. Up to 70% of the funds received by the country from Russian tourists were focused in these areas.