JUNE 2010 |
www.opp.org.uk
THE RUSSIAN REPORT Demographics | 33 Developer profi le
workers with decent wages to buy against a weak euro.”
Macia thinks that “family is important as well because no one believes Russia is a good place to bring up children or retire in … their pension system is practically non-existent.” One thing that the Russian buyer does NOT want to do is repair or refurbish and old property. “They really are not interested in DIY like the Brits,” says Armando Macia of Grupo Marjal. In Spain, “they all say they want a villa next to the sea but they can rarely afford it. We are seeing budgets are as low as €50k when the average price is €250k.’
What about in that other Russian favourite, Cyprus? According to Antonis Loizou & Associates the Russian buyer in Cyprus was traditionally interested in holiday villas
and beach apartments ... especially around Limassol. Their budget used to be €1m to €2m. Today, things are changing and the devalution of the rouble has made Cypriot houses more expensive by approximately 15%.) Things have also abeen affected by a new project V.A.T. tax in Cyprus adding a further 15%.
The end result, says Loizou, is that: • A new market is appearing now with an average budget of €400k to €600k.
• There is more and more family- orientated demand.
• Sales are not so much concluded through advertising and promotion, but more through personal contacts, either from existing Russian buyers or well connected Russian agents / friends.
• There are developers offering higher commission fees to well-connected Russian agents / contacts pushing up the average fee from 5% to 8% .. olr even10%.
Architects | new buyer is demanding
• Russian interest has been re-directed towards Larnaca and north of Paphos region (Polis Chrysochous/ Lachi area).
• Sales staff not of Russian origin (and who cannot speak Russian) have a far lower chance of concluding a sale, as opposed to Russian staff living on the island.
Brains | clever money is staying put
Loizou also worries that Cyprus struggles to meet Russian visa demands. The process is too slow. One glimmer of hope seems to be the Bank of Cyprus’ Russian branches (100 outlets) have offered to assist. Cyprus is also setting up attaché offi ces right across Russia. Loizou does not expect a major
Medics | are typical of the new buyer
Cypriot property recovery before 2014. It is time to sit tight. Armando Macia agrees: “The
Shrinking budgets | The average spend is down from €1m/€2m to €400k/€600k
clever money is staying put, in Russia. The clever money only moves overseas when Russia has a problem. Their economic outlook is looking ok at present, as long as oil prices stay up and the euro low. The high-end client will invest in Russia and if he does buy overseas … he will do so in London. The mid-high range client is staying put though or demanding the same property as last year for 30% of the price.”
In Greece, there are 300,000 Russians registered as permanent residents and more than 700,000 registered from the former Soviet
Union … giving a total population of more than 1 million Russian-speaking residents (almost 10% of the Greek population.) Greece is one of Russia’s most popular overseas markets with at least six Russian language newspapers being published in the country, along with a raft of magazines. “They mostly prefer the following areas,” says Antonio Kollaros of Domus Real Estate, “Crete / Corfu / Rhodes / Chalkidiki / Loutraki (on account of the casino located there) / and Athens’ southern suburbs facing the seashore. They can be divided into 3 categories:
Domus: buyer categories
Category 1 Buyers (individuals) of summers houses, with a budget ranging from €70k to €200k ... they usually purchase property in Crete / Corfu / and Loutraki.
Category 2 Buyers (individuals) of summerhouses, with a budget ranging between €201k and €6m ... they usually purchase property in Corfu / Crete / Chalkidiki.
Category 3 House buyers for permanent residence in the southern suburbs of Athens, with no budget restrictions. Their purchasing power ranges between €600k and €15m.
RUSSIANreport
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