The global financial crisis and European sovereign debt situation has not surprisingly meant that European overseas property investors have become more cautious . The release of positive growth figures from Russia could see international real estate agents and developers now target their efforts towards Russian buyers.
Russian retail sales are on the increase along with
wages, while unemployment is dropping and the Russian inflation is also falling
to 6%. A Morgan Stanley Economic
Report, growth in Russia is poised to accelerate by 5% by the end of this
current year, and up to 5.5% again in 2012.
Meanwhile the Business environment is
healthy, with many companies achieving excellent capital growth. However
corruption is still abundant, so off shore investments are a popular alternative
method to allow for secure profits and capital gains.
It has been estimated by many press reports,
that over US$12 Billion will be invested by Russians overseas in the next
twelve months.
Much will be earmarked towards international
real estate, and this was echoed by the record attendance at last weekendââ¬â¢s Moscow
International Investment Show.
The rising middle classes are seen as the
new investor with huge potential for overseas investment.
The middle class have increasing wages, low
monthly overheads, (US$100 will pay for general overheads such as gas,
electricity, water and telephones for a month.) only 13% tax on declared income
and less than 8% have mortgages to repay.
Proof that this sector is moving towards
buying property abroad is echoed by Yandex, Russiaââ¬â¢s
largest search engine. Yandex showed massive increases in specialized searches
for property aboard. Over 512,572 searches were made in just four months up to
May 2011, against 382,979 during a similar period in 2010. Cyprus had the
largest increase with 56.5% more searches, with the USA achieving a 48.8%
increase.
Statistics from 1-property.ru
Russiaââ¬â¢s leading real estate online portal, showed searches for international
real estate also had a dramatic increase. Bulgaria topped the list with 17% of
all searches. Easy destination, language and similar mentality were the main
reasons given. Spain came in second, however over 21% of all searches were for
other non European destinations.
International
Residence magazine
held a recent survey and asked Russian investors what their main reasons were for
buying abroad. Over 55% stated that it was for a safe investment, 30% for personal
enjoyment and 20% wanted to create income with buy to let property.
Although
a large percentage of Russians read magazines and go online, another important
source where they like to conduct their own research is at property expos. During
the past 12 months over 119,000 visitors attended thirteen real estate expos
held in Moscow, while another eight expos held in St Petersburg attracted over
66,500 investors.
According
to aiGroup the Moscow based exhibition organizers, they are having to
turn away exhibitors due to lack of space. The Russian market is completely
different from more established markets across Europe, so developers and
realtors are now being encouraged to attend conferences and seminars providing
valuable information on how to sell to Russian based investors.
CEO of
the aiGroup, Kim Waddoup said, ââ¬ËRussianââ¬â¢s have in the past invested heavily in
Europe, but with that regionââ¬â¢s financial difficulties, we are seeing a swing
towards more secure markets. For example Asia, where there are number of direct
flights from Moscow is seen as a secure market and is becoming a top target for
Russian end users and investors alike. ââ¬â¢
Their 2nd
Russian Summit is being held on 17th-18th November in Moscow
enabling overseas developers and agents to listen to experts on ââ¬Ëhow to sell to
Russians.ââ¬â¢ This event will also hold a networking expo with over 150 Russian
based realtors looking to represent overseas companies. The full list of
speakers and their topics is available at www.russiansummit.com
