Top 5 countries for real estate investment in 2024
The most favorable countries for Russians are still Thailand, the UAE, Turkey, Cyprus and Indonesia. Each of these countries is very familiar to Russian investors – it was there that there was a surge in demand in 2022.
Real estate investment in Turkey
“Today we see a decline in the interest of Russians in real estate in Turkey. Thus, according to the Turkish Institute of Statistics, in February 2024, Russians purchased 395 real estate, which is 3 times less than a year earlier. Despite this, Russian citizens hold the leadership among foreigners buying real estate in Turkey”, – comments Mila Grebenshchikova, Deputy Chairman of the Board of Directors of Mayalanya Group.
However, the Turkish market has recently gone through a number of economic shocks as well as legislative changes. Of some of the economic factors: extremely high inflation and instability of the local currency, as well as high lending rates from the national bank.
“Turkey has passed a law on “Rental of Real Estate for Tourist Purposes” that will affect most private investors who bought apartments on the coast to rent out. In order to rent out property for a short period of time, it will be necessary to obtain a license from the Ministry of Culture and Tourism. In addition to this change there are also changes regarding the issuance of residence permits for investment in real estate – Turkey has raised the cost of real estate, the purchase of which allows you to obtain a residence permit, up to $ 200 thousand. These changes may be interpreted differently in the real estate market, but in general rather slightly reduce the attractiveness of this destination.
This has already led in a moment to a decrease in profitability. Residential real estate in Turkey, now brings its owner 3.5-5% per year, “- says Nikita Shelomentsev, founder of a development and investment company in Bali, Indonesia.
In addition to passive income from renting, real estate investments can serve as a means of obtaining immigration status. Thus, to obtain a residence permit in Turkey, you need to buy real estate, the estimated value of which will be $ 200 thousand. To obtain citizenship of the country will need to invest a minimum of $ 400 thousand.
Investing in real estate in Thailand
On the other hand, interest in Thailand real estate has increased. 17% of demand for foreign real estate among Russian investors in the first quarter of 2024 was in this country. The yield from owning real estate in Thailand is 8-10%, while housing prices are relatively low. For example, the cost of apartments in 1 km from the beach starts from $50 thousand.
“The advantages of investing in real estate in Thailand include a low entry threshold into the market, high rental yields and the possibility of guaranteed income. Rental yields are typically 6-8% and guaranteed income can be fixed in the contract at around 6% per annum. Thailand benefits from the fact that tourists come here all year round. In Thailand there is no concept of “off season”, there is only the concept of high and low season, as the air temperature is almost the same all year round. In the “high” season Thailand attracts tourists from the CIS countries, Europe and America, where at this time, the fall and winter. In the “low” season in Phuket there are a lot of guests from China and other South-East Asian countries, as well as from Australia”, – comments Nikita Shelomentsev.
Recently introduced visa policy for Russian citizens, increasing the period of stay up to 90 days, further stimulates interest in investment in Thai real estate
Real estate investment in Bali Island (Indonesia)
Bali Island is another attractive location for Russians.
“The number of real estate transactions among Russian investors in 2023 increased 1.5 times compared to 2022. The yield from owning real estate there reaches up to 15%. Today you can buy an apartment in the Bukit area starting from € 85 thousand. Such an investment will pay off in 3-5 years. Now the island is actively building and developing, so in the short term prices will rise,” – explains Mila Grebenshchikova.
There are not many countries where you can for several years to have a stable yield from passive rental real estate at the level of 10-12%, if we are talking about the purchase of ready-made objects or 12-14% and above, if the object is purchased at the construction stage.
What makes it possible to achieve such high values? High demand and the ever-increasing number of tourists arriving on the island. Before the coronaviruses, this figure reached 6,500,000 people a year. In 2023, the tourist flow has almost recovered from the pandemic and reached more than five million, while the forecast for the 24th year is to reach 7,000,000.
At the same time the amount of supply is significantly limited, as Bali still has serious restrictions in terms of the introduction of new areas: there are restrictions on the height of buildings, most of the buildings here can not be higher than 15 meters. A large amount of land is in a protected area. Even those lands that are intended for building, not all areas are allowed to build real estate for daily rent. There are special purpose lands allocated for tourism and renting out real estate to tourists can only be located on such land, obtaining the appropriate license.
Indonesia’s economy is one of the most growing in the world, now it is in seventh place among all countries by GDP and is projected to enter the top five largest economies in the world by 2045. There is no seasonality and tourist flow is stable throughout the year.
If we talk about the figures in more detail, in addition to the opportunity to receive passive income from renting out, there is also an opportunity to earn on the growth of the value of the asset from the moment of construction to completion. Using the example of previous years, the growth of the asset value during this period can reach 25-35%. At the same time, there is a long term growth in asset value due to rising prices – some of the most sought after tourist areas such as Changgu, Pererenan, Bukit have seen land values increase by up to 20-30% in the year before the pandemic, as well as during the post-pandemic recovery period. And the corresponding increase in value
Real estate investment in Cyprus (Greece)
Greece witnessed impressive capital inflows into real estate in 2023, reaching a record high of €2.13 billion. Foreign investment in real estate accounted for 47% of the total €4.48 billion, indicating significant interest in the Greek real estate market. However, the last three months of 2023 saw a decline in foreign investment to €489.5 million, the lowest in four years.
“There may be a short-term surge in demand due to changes in the conditions under the Golden Visa program. Third-country investors participating in the Golden Visa program have invested most of their funds in Greek real estate. However, as of March 31, 2024. Greece raised the threshold for entry into its program, setting a transition period until August 30, 2024 for participation under the old conditions. This may spur demand for real estate in Q1 2024, but may reduce interest in the long term after the entry threshold is raised,” Shelomentsev continues.
In terms of yield, this market is slightly more conservative and familiar to Russians, along with neighboring Cyprus, and you should expect a yield of 4-5% per annum
Investing in UAE real estate
UAE also gives the opportunity for a long legal stay in the country through a resident visa. To obtain it, you need to own real estate in the amount of $200 thousand – in this case, its validity will be 2 years. The size of investments affects the term of the visa – when investing more than $545 thousand, it increases to 10 years.
“In 2024 for investment I would consider buying real estate in Dubai. Prices here are comparable to Moscow prices, and conditions are much more attractive. Obvious pluses – the price includes concierge, swimming pool, gym, underground parking, access to beaches, finally, sunshine all year round. The region is actively developing. Casino projects in Ras al-Khaimah, the construction of a giant copy of the moon in Dubai, the opening of museums and technology center – these and other initiatives will attract more tourists to the region, “- specifies Aslan Patov, a real estate expert in Dubai, CEO of Gaia Living Real Estate.
Property in Dubai can be rented out and earn from 7 to 12% per annum for a good object. Now a lot of branded apartments are being built here, in a few years such objects are resold with a 30-50% income. I have not heard of cases when an investor invested in real estate here and lost money. We should not forget that there is no income tax in the region, a stable economic situation and a high level of security.
Plus, the government has recently reduced the requirements for a golden visa: it can be obtained by foreigners who have bought real estate not cheaper than 2 million dirhams (now about 49 million rubles, as for a two-bedroom in Moscow). It is not necessary to make the mandatory first payment of one million dirhams. The relaxation of conditions will lead to accelerated growth of the market and its attractiveness to foreign investors.
“In my opinion, it will be very difficult to make money on real estate in the Russian Federation in 2024 in the coming years. Other areas of investment will show much more attractive returns. If you are still considering real estate, pay attention to options abroad,” summarizes Aslan Patov.