INDUSTRY


08 | INDUSTRY News analysis


News Analysis: Debunking the Russian myths


As Russian buyers return to the overseas property market, agents need to remember its no longer about oligarchs and suitcases of money but educated and professional buyers looking for a good deal, says Stephen Harris.


AGENTS across Europe and the Middle East will tell you that Russian buyers are coming back to the market. Rising oil prices, a strengthening


rouble and economic recovery are feeding Russian confi dence and buying power, while continued fears about their own economy are encouraging people to look overseas for safer places to put their money. But the Russian market is changing


and the myths surrounding what has always been an enigmatic and private set of buyers continue to create a barrier for agents. Often these myths contradict each


other: some still think of oligarchs splashing out on the most opulent status-symbol homes while others refer to cautious and secret deals involving suitcases of money that need to be hidden from the authorities.


New class of buyers Stereotypes are sometimes rooted in truth but are particularly unhelpful when you’ve got a new set of buyers on the scene. Even at the top end of the market, in places like central London, agents need to look well beyond the super-wealthy. “It’s not just oligarchs who are buying


but company directors, top managers and even mid-level management,” says Jennifer Foort, head of Savills’


“They’re not necessarily more cautious but they will drill down more into the details”


Russian desk. The growing middle classes have also


opened up much cheaper destinations to the potential of the rouble. Bulgaria


Avoiding stereotypes | The traditional images and myths of Russia are becoming ever more unhelpful and inaccurate as new buyers enter the overseas property market


as Greece, Cyprus and Egypt have seen buyers with much smaller budgets entering the market. Part of this also has to do with the


growing desire for a good investment. Russians don’t throw money away without thinking as some believe, says Richard Hazel of Italian agent Windrush Alliance. “They now have money, whereas for


a long time they did not. Overseas is a good option as in a lot of cases it is a good investment and most importantly they are getting their money outside of Russia into a safer economy.” At the other end of the scale, there’s


a belief that Russians are unfamiliar with the sales process and suspicious of investment products. “They’re not necessarily more cautious than other nationalities but


well-travelled businessmen who are well aware of the process of buying. There


“One commonly- held belief rings true whomever you talk to: privacy is top of their list.”


is an element of it because security is important in their own country but once you reassure them that their information is confi dential they are usually wiling to give you what you need.” The fear of doing business with


fellow Russians for fear of being reported to the tax authorities has gone, says Cypriot agent and chartered surveyor Antonis Loizou. As a result, if you have staff of Russian origin, you now have a better


has been the number one destination for Russians since August 2008, according to portal Prian.ru, while markets such


most Russians will drill down into the detail,” says Foort. “Our clients are mostly educated,


chance of completing a deal and making the sale than if you have non- Russian-speaking staff, he adds. However, Tatiana Rodionova, president of FIABCI Russia, argues that Russians don’t like giving out budget or contact details – or even a smile – to people they don’t know. “They also don’t like deals that are too complicated such as shared


“Russians don’t like giving out contact details to people they don’t know”


ownership,” she says. Another truth is the enthusiasm for


countries that allow property owners to apply for resident visas, she adds, and countries like Bulgaria and Finland have taken advantage of this while the US market has lost out. But the continued popularity of


major cities with world-class cultural and business communities like London shows that the right destinations can attract buyers without the visa situation becoming a major issue. One commonly-held belief about


Russians rings true whomever you talk to: privacy is top of their list. Whether that translates into a


desire to be away from their fellow countrymen depends on the individual, and Foort says it’s an even split between those who prefer to be part of an existing Russian community of buyers and those who don’t. And this underlines a key point.


Russians are like any other group of people – you can’t label them all in the same way. Agents need to be aware of cultural


differences and see past the myths where they can, but above all treat all customers as individuals.


www.opp.org.uk | JUNE 2010


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