According to the most recent report released by the Central Bank of Russia (CBR), cross-border transactions into foreign real estate were more than halved last year. The volume of real estate purchases abroad plunged by over $1 billion to just $926 million in 2015, compared to $2 billion in 2014. The brutal ruble devaluation and economic recession in the Russian Federation are the main reasons behind this steep drop off in overseas property activity.

The Central Bank of Russia has been publishing data on cross-border transactions for real estate since 2009. Overseas transfers rose rapidly for the first six years of these reports before entering anegative spiral amid growing economic and geopolitical disquiet.

However, it is worth noting that CBR figures only account for personal transactions, meaning that most commercial property purchases are not included because they are commonly set up by businesses rather than individuals. This important distinction emerged after Russian buyers changed attitude towards foreign property: from 2014 onwards, many Russians turned their focus to commercial property as ameans to preserve capital and earn income inareliable currency inresponse to the negative economic climate back home. This is confirmed by Tranio's most recent findings inthe Russian Buyer Report 2015 according to which overseas transactions with Russian-speaking clients fell by 50% but commercial property investments increased by 20%.

-> Russia and CIS overseas commercial buyer report 2015

Even interms of quarterly transactions, volumes were halved. In Q4 2015, Russian buyers spent just $219million, compared to $507million inQ4 2014. This volume was last witnessed in2009 when Russia emerged from the last crisis with quarterly transaction volumes of just $217million. Nevertheless, interms of quarter-on-quarter results, the decline seems to be stabilising, falling by only 6% between Q3 and Q4 2015.

In 2015, total Russian spending on overseas services and goods amounted to $24.6billion, half of what was spent in2014 ($49.7billion), highlighting the general downwards trend. Most of the transactions were located inSwitzerland, Latvia, the USA, the UK and Cyprus. Ukraine has become the leading destination for cross-border transfers inthe CIS.

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