Protests in Iran could trigger an increase in demand for property abroad
Mass protests in Iran at the end of December provoked a growth of interest among local residents to foreign real estate: in particular, to the UK, Canada and Turkey.
A study published in 2017 by Tranio showed that economic and political instability is one of the main reasons why Russians buy profitable real estate abroad. A similar effect may have protests in Iran. The Tranio data show that the demand of Iranian investors for overseas property has already begun to grow: in December we received 2.5 times more bids than in November. According to our forecasts, the number of transactions with Iranian buyers will increase significantly this year.
“Over the past two years, after Obama eased sanctions against Iran, there are more Iranian clients in the UK market,” said Yevgeny Tripuk, broker of the British financial company Arc & Co. – However, banks are in no hurry to lend them. As a rule, funding is available to those who have a second citizenship or are resident in another state. But even in such cases, banks usually ask for confirmation that the client does not have income and assets in Iran itself, that is, the cash flow has nothing to do with this jurisdiction. ”
According to the London real estate agency Rokstone, usually Iranian citizens are interested in real estate worth from 1 million to 30 million pounds sterling in such prestigious areas as South Kensington, Mayfair, Knightsbridge, St. John’s Wood and Hampstead.
In 2017, the United States banned the entry into its territory of citizens of eight countries, including Iran. This is partly why many Iranians choose Canada adjacent to the States, which, although it has closed the Iranian consulate in Ottawa, does not restrict the entry of Iranian citizens into its territory.
“Toronto has a lot of investors from Iran. Approximately 65,000 Iranians live here, almost two-thirds of the diaspora living in Canada. Demand for real estate from their side is high – the second largest after China, – says Natalia Sheiman, a representative of Royal LePage Your Community. – Iranians invest in different real estate, depending on the possibilities. Construction is especially popular: they often buy an old house with land and build a new one in its place. ”
According to the Institute of Statistics of Turkey, in 2017, Iranian citizens made 792 real estate transactions in Turkey (3.5% of the total number of foreign purchases), which is 19% more than in 2016. However, according to Maria Zhary, head of the Turkish direction Tranio, over the last month the demand for Turkish property from the Iranians has not changed. “A year ago, due to political instability in Turkey and the subsequent reduction in the number of buyers from Russia, Turkish brokers were happy to cooperate with alternative markets, including Iranian ones. And now, when the situation has leveled off, most agencies rely on Russian-speaking clients. This is due to the specifics of buyers from Iran: often the transaction does not reach a logical conclusion or in the process there are any complications, – says Maria Zharaya. “In Turkey, Iranians prefer apartments with 2-3 bedrooms costing up to $ 100,000 in complexes away from the sea.”
According to Knight Frank, the number of dollar millionaires in Iran from 2016 to 2026 will increase by 40% to 48.4 thousand people. They will all need a reliable tool for saving funds, which could be real estate abroad. According to Rokstone forecasts, over the next 5–10 years, Iranian buyers with a fortune of $ 30 million will spend about $ 8 billion on overseas facilities.