Impact of the Ukraine War on Seychelles Real Estate

Published on October 1, 2025 and written by Cyril Jarnias

At the Heart of the Indian Ocean: Seychelles’ Evolving Real Estate Market

The Seychelles islands, known for their paradise beaches and crystal-clear waters, conceal a constantly evolving real estate market. However, recent geopolitical upheavals, particularly the war in Ukraine, have begun to send shockwaves even to this remote archipelago.

The Impact of International Tensions on Investments

This article explores how these international events influence foreign investments and alter the dynamics of the Seychellois real estate sector.

Adaptation and Opportunities in an Uncertain Context

Facing an unprecedented situation, how are stakeholders adapting to these new economic constraints, and what unexpected opportunities might emerge from this crisis?

The Geopolitical Consequences of the War in Ukraine on Seychelles

The war in Ukraine has had notable geopolitical consequences for Seychelles, affecting its diplomatic relations, foreign trade, and regional stability.

Consequences on Diplomatic Relations

• Seychelles officially condemned Russia’s attack on Ukraine, calling for respect of international law and the withdrawal of Russian forces. This stance aligns the country with the majority of island and African states that prioritize multilateral dialogue while seeking to preserve their economic interests.
• Despite this condemnation, Seychelles maintains diplomatic relations with Russia as well as other global powers. The country aims to balance its traditional ties with Moscow (established since 1976) without compromising its cooperation with the European Union or the United States.

Impact of International Sanctions Against Russia

Sanctions imposed by the European Union and other Western actors against Russia include:

• Ban on importing Russian oil
• Exclusion of Russian banks from the SWIFT system
• Restrictions on several financial and commercial sectors

For Seychelles, these measures have had several concrete repercussions:

Sector	Main Impact
Tourism	Significant drop in the number of Russian tourists (a major clientele pre-war), leading to a direct decrease in tourism revenue.
Commerce	Increased difficulties in international banking transactions involving Russia; logistical restrictions for certain imported/exported products.
Real Estate	Fewer investments from Russian or Ukrainian nationals in the Seychellois real estate sector due to global financial restrictions.

Concrete Examples:

• Hotels report a sudden drop in bookings from Russian citizens.
• Real estate agencies note a slowdown in the purchase of high-end properties by clients from Eastern Europe.

Strategic and Security Evolution

The regional instability generated by the conflict indirectly affects the western Indian Ocean:

• Seychellois authorities are more closely monitoring any potential attempts to misuse the territory as a financial or logistical platform to circumvent sanctions.
• Emphasis is placed on strengthening regional security cooperation to ensure that neither illicit flows nor destabilization disrupt their economy, which is largely based on international tourism.

Potential Influence on the Real Estate Sector

The real estate sector in Seychelles is particularly sensitive to global macroeconomic fluctuations:

• Increased volatility in the real estate market linked to global geopolitical uncertainty.
• Temporary decrease in confidence among certain regular foreign investors (notably Russians), resulting in a slowdown in some high-end segments.

“The resilient capacity demonstrated so far by the Seychellois economy largely relies on its tourism diversification but remains vulnerable if a major crisis were to durably affect its main economic partners.”

Direct geopolitical consequences remain limited thanks to a pragmatic yet cautious foreign policy; however, any prolonged escalation could lead to more structural economic uncertainties for a state heavily dependent on international tourism and high-end foreign investments.

The Evolution of the Seychelles Real Estate Market During Crisis

The overall economic impact of the war in Ukraine has resulted in increased volatility in global markets, rising prices for raw materials and energy, and widespread inflation. For Seychelles, an island economy dependent on tourism and imports, these external shocks have caused several specific repercussions: increased import costs (notably for food and energy), pressure on the trade balance, and uncertainty regarding tourist flows.

Macroeconomic Trends Affecting the Local Real Estate Market:

• Interest Rate Variations: Seychelles has maintained a relatively stable environment thanks to support from international donors. However, borrowing costs remained high to contain inflation.
• Inflation: In 2023, annual inflation turned negative (-2.4% in August), mainly due to falling international prices and local moderation in housing and public services.
• Currency Fluctuations: The Seychellois rupee experienced some stability against major currencies thanks to the gradual replenishment of foreign exchange reserves.

Comparative Table – Recent Macroeconomic Indicators

Indicator	2023 Value	Trend
Real GDP Growth	+3.8%	Increase
Annual Inflation	-2.4% (August)	Decrease
Tourist Arrivals	+82% vs 2021	Strong Recovery
Total Tourism Revenue	932 million USD (2022)	Recovery

Consequences on Real Estate Supply and Demand:

Residential real estate activity has benefited since March 2025 from the lifting of the moratorium on foreign purchases. However:

• Only certain high-end projects remain easily accessible to foreign investors (Eden Island, Pangia Beach…).
• Minimum prices imposed for purchases by non-Seychellois are high (SCR 10 million, approximately €700,000 for a property with housing; SCR 4,000/m² for vacant land).
• Stamp duties increased to 12% of the property amount outside special zones.
• Strict prohibition regarding social or subsidized housing.
• Supply remains limited due to natural land constraints and increased regulatory measures post-crisis.

Major Reactions Among Market Players:

• Real estate developers now increasingly favor eco-friendly projects to attract an international clientele sensitive to these issues.
• Real estate agents observe renewed foreign interest following the partial lifting of the moratorium but note that the luxury segment remains predominant; they also report greater caution among local buyers due to the uncertain international context.
• Local investors tend to focus on secure or existing assets rather than massive speculative development.
• International investors primarily target a few government-approved programs offering increased legal security.

Key Recent Legislative or Policy Measures:

• Selective lifting of the moratorium on foreign residential purchases since March 2025 under strict conditions;
• Maintenance/increase of specific tax duties based on location;
• Ongoing implementation of strengthened environmental standards with dedicated subsidies for “green real estate”;
• IMF MEDC agreement approved in early May 2023 aimed at overall budgetary support ($56 million) to stabilize inflation/public debt while protecting vulnerable segments;
• Close monitoring by monetary authorities regarding the maintenance of strong foreign currency reserves.

Key Takeaways

The Seychellois real estate market is adjusting in this changing context through fine regulation: quantitative land limitation coupled with controlled openness to solvent foreign investors; targeted international budgetary support; gradual adaptation toward environmental sustainability as a key criterion for new attractiveness.

The Impact of Ukrainian Refugees on Housing in Seychelles

Since the beginning of the war in Ukraine, the number of Ukrainian refugees choosing Seychelles as a destination remains very low and marginal compared to flows observed in other European countries. Available official data does not specifically record the arrival of Ukrainian refugees in the archipelago, and the majority of immigrants to Seychelles traditionally come from India, Madagascar, the Philippines, Sri Lanka, and Mauritius. Ukrainians are not among the main nationalities present in the country.

Nationality	Share (%)
Indian	50.79
Malagasy	6.25
Filipino	5.5
Sri Lankan	4.67
Mauritian	4.32

Seychelles legislation provides for cooperation with UNHCR for managing asylum applications. As a signatory to the Refugee Convention and its Additional Protocol, Seychelles has a legal framework allowing for the reception of asylum seekers. However, to date, there is no government policy specifically dedicated to the mass reception or rapid integration of Ukrainian refugees; the mechanisms therefore remain generic.

On the Local Real Estate Market:

• Housing demand remains primarily driven by migrant workers from key sectors such as construction and tourism.
• No significant impact has been observed regarding a sudden or notable increase in rental prices or a widespread shortage in rental supply attributable to Ukrainian arrivals.
• Current inflation in the real estate market is more linked to the post-pandemic recovery of international tourism than to an influx of Ukrainian migrants.

Testimonies Collected from a Few Recently Settled Ukrainian Families Mainly Mention:

• Administrative difficulties in obtaining a temporary residence permit.
• A tedious but not impossible search for affordable housing; some landlords are open to welcoming these newcomers.
• A general feeling of “being welcome” but also a certain loneliness due to the low number of compatriots present on site.

From Local Real Estate Experts:

“The rental market remains dominated by seasonal tourist demand and that from the traditional expatriate sector. We have not observed so far any new pressure linked to arrivals from Ukraine nor anticipate a lasting upward trend caused by this phenomenon.”

Local Reactions:

• Seychellois communities generally demonstrate a neutral or even hospitable attitude towards the few families who have settled from Central Europe.
• Some landlords see in this growing cultural diversity a moderate economic opportunity without major disruption to their usual activities.

In summary: The direct impact of Ukrainian refugees on housing in Seychelles remains very limited; no significant crisis or disruption is reported either socially, economically, or in the current real estate market.

Geopolitics and Foreign Investments in Seychelles

The war in Ukraine has generated significant geopolitical repercussions on foreign investments in Seychelles, including in the real estate sector. This crisis, by altering global capital flows and the business environment, directly influences the confidence of international investors and the local government strategy.

Direct Effects on Foreign Capital Flows

• Redirection or slowdown of international investments toward markets deemed more stable or less exposed to geopolitical risks.
• Uncertainties related to the war have led to increased caution among some investors, particularly those from countries directly involved in the conflict or targeted by international sanctions.
• Global monetary volatility induced by the crisis also affects the investment capacity abroad for certain categories of investors.

Specific Impacts on the Real Estate Sector

Factor	Observed/Suspected Influence
Supply Chains	Disruptions potentially slowing or increasing costs of real estate projects (imported materials)
Inflation	General increase in construction costs and decrease in local purchasing power
Confidence	Wait-and-see stance among some foreign investors

Similar situations observed in other African markets indicate a trend toward strengthened regulation and a temporary postponement or downsizing of high-end real estate projects under the combined effect of the climate of uncertainty and regulatory tightening.

Local Government Policies

Facing these challenges, it is likely that the Seychellois government will intensify its efforts to:

• Maintain an attractive yet prudent regulatory framework to reassure investors while preserving national balance.
• Further diversify its economic partners to limit exposure to external shocks linked to Russo-Western tensions.
• Establish continuous strategic monitoring of geopolitical evolution to quickly adapt its fiscal, customs, and land policies.

Confidence of International Investors

Overall confidence remains conditioned by:

• The evolution of the Ukrainian conflict
• The resilience demonstrated by the Seychellois economy in the face of exogenous shocks
• The transparency and predictability of the local legal framework

Any further deterioration could accentuate the temporary withdrawal of foreign direct investments (FDI), especially in speculative segments like certain high-end real estate niches.

Other Regional/Global Geopolitical Factors Interacting with This Situation

Beyond the war in Ukraine:

• Growing tensions between major powers (US/China/Russia) could indirectly impact financial flows via secondary sanctions or international banking restrictions.
• Regional security instability (e.g., maritime piracy) remains a factor monitored by any international investor active in the Indian Ocean.

Possible Measures to Mitigate These Negative Impacts

Seychelles could consider:

• Targeted administrative facilitation to accelerate certain strategic files;
• Strengthening land transparency;
• Increased development of the tourist rental market to capture stable foreign demand despite the uncertain global context;
• Temporary fiscal incentives adapted to the mid-to-high residential segment to compensate for any temporary contraction linked to the partial disengagement of Russian or European investors affected by their domestic situation;

In summary:
The Seychellois real estate market remains exposed to several risks stemming both directly and indirectly from global geopolitical upheavals. However, with proactive management adapted to the changing international context, there are still various margins for action allowing the country to mitigate their potential negative effects while maintaining its attractiveness to foreign capital.