The interest of Russians to foreign real estate is growing again. Returned to the market buyers who kept their savings in national currency and decided to wait after the devaluation of the ruble. The priorities of buyers has changed significantly. Fewer people looking for homes to stay, now the main thing — the income in foreign currency and the possibility to obtain a residence permit.
The Russians have again awakened interest in Western real estate. According to Knight Frank, the number of requests for acquisition of foreign real estate during the first half of 2016 increased by 12% compared to the same period last year. According to experts, the demand continued to grow in the summer. The greatest interest is noted for areas such as Spain and Cyprus.
“We are seeing excitement among buyers interested in Spain. This country has always been popular, and in 2016 the demand during the year remained high. Mostly there are buying real estate for yourself and your family. There are buyers who already have a house here and invest in commercial facilities: shopping malls, restaurants, shops, etc. This, incidentally, happens quite often. The rate of return on such assets at the level of 5-7%, which is in principle comparable with other European countries”, — said Yulia Ovchinnikova, Director of international property Savills in Russia.
Cyprus in recent years has attracted investors wishing to obtain citizenship of EU countries.
By itself, the property, as noted by Ovchinnikov, attracts much fewer buyers. Recall that the Cyprus government has announced its intention to reduce the financial requirements for investors within the framework of its program “Citizenship through investments”. Now the individual investor only has to invest €2 million and not 5 million like I used to.
“We note high interest in the Cyprus property primarily connected with the passport software. The island has many interesting objects, including an ambitious new projects. However, these objects are very overrated and it is hardly necessary to consider them as a profitable investment decision,” — said Marina Bogdanova, Director, business development at UFG Wealth Management.
Thanks to the new policy of Cyprus, as noted in Knight Frank has increased the number of requests for a selection of properties with a budget of €2.5 million the average budget for a year practically has not changed: the majority of applicants plan to purchase a cost of €1.5 million to €6 million.
The recovery in the real estate market associated with the fact that with the crisis, accepted the buyers who expected that the ruble will play the position.
Making sure that in the near future, improvements should not wait, they are again actively investing. As a result, according to Knight Frank, the share of rouble queries in total volume of demand reached 15%.
More and more people buy housing for investment purposes or for immigration. In the first half of 2016 the number of requests for investment property reached 80%. For comparison: in 2014, investment queries was about 60%, according to Knight Frank.
Of these 80% of requests, approximately 10% have made business (the share in the PV Park, meat production, etc.). Commercial objects and ready business are looking for another 35% of buyers whose primary goal is obtaining a residence permit.
In search of areas for investments, look at Germany.
The budget of €10 million 80% of the demand for commercial real estate (supermarkets, offices, etc.).
In the budget from €1 million for the purchase of commercial properties targeted 65% of the queries. In the second place the ratio of interest to residential and commercial properties Cyprus: here area for business interested in 20% of buyers, housing — 80%.
Interestingly, against this background, declined interest in Eastern Europe, which Russians traditionally valued for its proximity and affordable prices.
“In the markets of Croatia, Montenegro we are not seeing yet some recovery from customers. Although in Montenegro now built a number of interesting projects that can cause the active interest of buyers consider their options for own stay and for other purposes such as renting,” says Ovchinnikov.
Marina Kuzmina, Director of foreign real estate Knight Frank, notes that while the interest of buyers to overseas property grows, the priorities have changed significantly.
“Trying to get the income in foreign currency, buyers shifted with apartments and villas for a holiday in an attractive investment property. Also seeing growing demand for businesses in different regions of Europe,” she said.
