Russian property investors in Catalonia forced to broaden investments due to Ukraine war

Russians hoping to invest in property in Catalonia have had to change the way in which they do so due to the economic sanctions imposed on Russians in response to the invasion of Ukraine.

The main factors contributing towards the Russians’ diminishing opportunities include the banning of Russian banks from SWIFT, the devaluation of the Ruble against the Euro, and Russian planes being excluded from EU airspace, as well as the uncertainty surrounding the situation.

The Official College of Industrial Property Agents (COAPI), have observed two main changes in behaviour within the market.

The first is a sharp drop in a large proportion of the transactions already underway by Russians and Ukrainians, and the second is the speeding up towards completion of sales already in progress.

Miquel Laborde, co-founder of property investment advisors Laborde Marcet, told Catalan News that some Russian customers are “really scared about the situation”, and questioned whether they would invest money in real estate at this time.

As a result, Russian investors, who make up 3% of the buying and selling of property in Catalonia by internationals, have had to broaden their investment choices, in order to make up for the rapidly decreasing options available to them.

“Most Russian people that invested through Laborde Marcet were buying commercial units in prime locations, but now the current situation means they have to invest in any real estate that they can buy,” Laborde pointed out.

However, owing to the proportionally small number of Russian investors, both compared to foreign investors and including Spanish nationals, as it stands, the impact on the market as a whole should not be drastic.

Anna Puigdevall, Managing Director of AIC assured that “the impact of the armed conflict on the property market shouldn’t be too significant given the small presence of Russians in Catalonia.”

Despite this, with the future of the war in Ukraine up in the air, there is plenty of scope for the situation in the property market to also change.

Lola Alcover, COAPI secretary, warned that the current situation is “without doubt” quite uncertain and that things could become “very complicated very quickly”, adding that the state of the market would deteriorate significantly if the “war spreads beyond Ukraine”.

However, although the housing market remains broadly unaffected, many businesses, particularly Russian ones, have seen the war interrupt their trade.

In 2020, Catalonia was the territory with the third highest number of foreign property buyers at 7,748, after the Valencian region and Andalusia. A total of 11.1% of property purchases were made by internationals.

The type of home also impacts what region Russians are buying in. For example, Russians purchasing their first home tend to look for houses and penthouses in the biggest cities, whereas those looking for their second homes do so in more rural and often coastal parts of Catalonia.

Split by region, Girona, in the north of Catalonia, had the highest proportion of international buyers at 22.3%, likely due to the high-demand Costa Brava, this was followed by Tarragona at 11.4%, Lleida at 9.6% and Barcelona at 8.7%.