As The Russian Economic Meltdown Continues, Wealthy Russians Are Fleeing With Their Money

The home of Roman Ambrovich in Kensington Palace Gardens, London. Source: Neil Hall / Rex Features

Russian Economic Meltdown Sparks Wave Of Panic Buying London Homes -- The Telegraph

Russians protect their wealth from currency crisis by sinking it into London property

Wealthy Russians, desperate to get their money out of Moscow in the wake of the Russian economic crisis, are panic-buying in London this week, according to high-end estate agents.

Russia has lost control of its economy in the last few days after an interest rate hike by the central bank failed to stem the collapse of the rouble, accelerating the trend of Russian buyers in the UK capital.

Beauchamp Estates said it has seen as much as a 10pc uptick in sales of luxury London homes to Russians since the rouble started to spiral a year ago.

"I currently have half a dozen Russian clients urgently looking to spend over £20m each on buying a new home in central London. For them the address must be Belgravia, Knightsbridge, Mayfair and Regents Park, it's got to be a prestigious postcode and ideally a park side or leafy address," said Gary Hersham, founder of Beauchamp Estates.

There has also been a rise in Russians looking at investment properties, he continued.

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My Comment: The Telegraph is a few weeks late .... but their reporting is spot on. The money is pouring out of Russia .... something that I first notice late October. Here are two examples ....

Being from Russia and having a large family that is sill involved in Russian business and politics means that I have a lot of contacts in Russia .... and (yes) some of them are extremely well off. All of them also know I live in Canada, and each year one or two of them do ask me on what are the investment opportunities in Canada .... but nothing ever comes out of it. That has now changed. In the past month I have received a dozen requests .... all of them serious .... from people who want to know if Canada is a safe place for their money (it is), and what are the investment opportunities (primarily in real estate) for them. They are all making plans to come to Canada (and the U.S.) in the New Year .... and it looks like I am going to be busy host in January/February even though I am one of those who prefers to hibernate during winter.

My cousin's daughter is a registered real estate agent in Miami. She is in her mid-twenties and her sole (and only) job right now is to handle real estate transactions for Russian/Ukrainian clients .... an easy job since all of these clients are from her mother (my cousin) who has extensive contacts in both Russia and Ukraine and is extremely well known back home (she is being constantly interviewed on the Russian equivalent of CNBC/Bloomberg/etc.). In the past month my daughter's cousin has closed 5 sales involving million dollar plus homes in the Miami area .... and she is booked for the next two months exclusively taking care of Russian/Ukrainian clients who want to invest and buy expensive properties in the Miami/Florida area.

So yes .... Russia's elites are now sending their money out .... and my read on this is simple .... these people have lost confidence in Putin and in the Russian economy, and they want to protect some of their assets. And while I do believe that Russia's economy will bounce back .... probably sooner rather than later .... for those who have a lot of money .... they are all telling me the same thing .... they just do not want to take the chance.

Update #1: Some are arguing that Russian money is not fleeing .... or at least not to London .... Russians Quit London Luxury Homes as Only Super-Rich Stay (Bloomberg).

Update #2: I agree .... Data show Russian cash has already fled (CNBC).