Where Russians Most Frequently Purchase Real Estate
According to statistical data, this year, the number of real estate transactions conducted by Russians abroad has surpassed last year's figures by one and a half times. Concurrently, the number of transactions in the domestic market has significantly decreased.
Where do Russians prefer to purchase real estate? Teryoshkin S.I. conducted a thorough analysis and found that individuals are buying properties in the following countries:
- Spain;
- Cyprus;
- France;
- Malta;
- United Kingdom;
- Germany;
- Austria;
- Montenegro;
- Czech Republic;
- Italy.
In Spain, Russians predominantly prefer Catalonia and the southern regions of the country. On Cyprus, demand is high for both the republic and the northern part, which belongs to Turkey.
In France, individuals are opting for high-end real estate on the Côte d'Azur. In Italy, preferences lean towards Tuscany, Sardinia, and Milan.
In the United Kingdom, many gravitate towards London, while in Germany and Austria, properties in the capital and major cities are in demand.
Notably, over 60% of all transactions pertain to commercial real estate, including cafes, restaurants, boutiques, warehouses, offices, and hotels. A significant share of these transactions occurs in resort areas and large urban centers.
In the residential sector, Russians are acquiring apartments, flats, and villas. The price of properties varies significantly, with demand existing for both affordable and luxurious homes located along the coast.
This high demand for European real estate is attributed to the possibility of obtaining citizenship in the respective country. However, not all the countries mentioned grant citizenship to investors, regardless of the property value. For instance, Italy does not provide citizenship irrespective of the real estate purchase price, while in Spain, the investment must exceed €500,000. Cyprus allows citizenship upon purchasing properties worth €250,000, and multiple properties can be acquired; their values are aggregated for citizenship applications.
Additionally, investment in a country’s economy, such as job creation, can also pave the way to obtaining citizenship and subsequently full citizenship rights.
If needed, the property can be rented out, with such assets yielding over 10% annually. Moreover, the prices of properties acquired during the construction phase or nearing completion consistently rise, especially in resort towns.
How to Avoid Mistakes When Investing in Foreign Real Estate
Before purchasing property in a particular country, several steps should be undertaken to avoid mistakes and disappointments:
- Gathering information about the country. Initially, it's essential to visit the country where the real estate purchase is being considered. This will help define the selection criteria for the property. If renting out is planned, a thorough understanding of all taxation nuances is essential. Those intending to make a mortgage purchase should visit a bank to clarify the necessary documents for obtaining a loan, as well as inquire about the possibility of obtaining citizenship.
- Risk analysis. In Europe, real estate is subject to taxes, and utility costs are generally higher than in Russia. Therefore, it is crucial to evaluate financial capabilities before making a purchase. Assess whether there will be sufficient funds for property maintenance, repairs, etc. In some cases, it might be far more advantageous to rent a property occasionally for leisure.
- Infrastructure. When purchasing property for personal use, it's important to verify the proximity of shops, pharmacies, hospitals, educational institutions, parking, etc. All these factors affect life comfort and the property's value.
- Proximity to the sea. Properties located near the coastline tend to be priced higher than those further inland, offering stunning views and beach access within minutes. However, it’s important to note that coastal areas come with increased humidity, which, while manageable in warmer months, can be uncomfortable in colder seasons. Humidity also affects drying times for clothes and furniture, and there's a risk of mold forming on surfaces. Coastal regions also experience storms and hurricanes.
- Additional payments. There will be additional costs for document translation, opening bank accounts, notary services, stamp duty, registration taxes, etc. Generally, it's prudent to budget at least an additional 10% of the property’s cost for such expenses.
- Negotiation. Attempts to lower the price should only be made during in-person meetings, as remote negotiations often provoke negative reactions from sellers.
Furthermore, it is essential to plan in advance how payment for the property will be transferred. Most countries have stringent regulations against large sums of suspicious origin, particularly in the UK.
All documents pertaining to the property should be meticulously reviewed. When acquiring property from a developer still in the construction phase, it’s vital to verify their reputation and confirm that there are no debts or legal claims against them.
In this instance, not investing in professional assistance is not advisable. Every detail should be meticulously considered.
