Russia’s super rich is heading east to Cape Town for prime real estate after scrambling for properties in New York, a report on The Moscow Times said.
The report said that moneyed Russian buyers have quite an appetite for multi-million dollar homes with an expansive view of the city’s coast in recent years.
“They like lifestyle properties,” Sotheby’s International Realty head of South Africa’s Atlantic seaboard Brendan Miller told The Moscow Times.
According to Miller, the Russian buyers were fond of seaside and beachfront houses that cost between 10 million and 40 million South African rand ($950,000 to $3.8 million).
The report noted that Russian buyers are flocking to South Africa to buy properties due to favorable exchange rates and softer property buying policies among foreigners.
Citing data from CEIC, the report said the South African rand’s value has steadily declined since mid-2011. While Russia’s currency has also suffered a beating of late, its depreciation has been slower than the rand, the report added.
Home prices have dipped by 21.7 percent in euros and 19.4 percent in dollar terms, data from the First National Bank (FNB) showed.
South African laws are also lenient as compared to other countries.
“They are free to bring their money in and take their money out as they wish, which is Plus No. 1,” Miller told The Moscow Times. “It's an easy country. We're very accommodating.”
The FNB said real estate buying among foreigners in South Africa “have doubled from an estimated 2 percent of total buying in 2010 to 4 percent in the first half of this year,” according to the report.
In Cape Town alone, foreigners accounted for 7.5 percent of real estate purchases.
Russian oligarchs have long ranked number one among top buyers of luxury real estate in New York. They have since slowed down their buying activities following the Crimean crisis. Chinese buyers pushed them off the top this year.
However, fading geopolitical troubles could change their minds and send them back to the United States to satiate their need for upscale properties.
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