From Nubricks, the Overseas Property Blog, Dec. 2008:
http://www.nubricks.com/archives/1543/russians-seeking-overseas-homes/
"As Russians continue to search for the best ways to invest their new-found wealth, holiday homes abroad have become a favourite way to diversify their portfolios. The current global financial crisis may be affecting property markets around the world but it is not affecting Russian interest in investing overseas.
"Russian overseas investment has traditionally been centred in western Europe and the Mediterranean which are geographically close to home. Lately, southern European markets like Cyprus, Bulgaria, Turkey, Croatia and Montenegro have become extremely popular with Russian buyers. A recent New York Times article stated that a remarkable US billion has recently been invested by Russian developers in the small Montenegrin town of Budva.
"The article also states that one young Russian millionaire developer, Vyentseslav Leibman, is making an investment of US0 million. His plans include a 27-floor modernist hotel, high-end seaside villas and a marina where the new Russian super-rich can moor their fashionable yachts.
"Despite the financial crisis, "the money keeps coming," said Leibman. "And hopefully, the global crisis will help sober up the cost of land here, which is now more expensive than Monaco."
"Even before the credit crunch, Russians generally preferred to use their savings to buy off-plan or new developments in near emerging overseas markets. Russia's neighbour, Finland, is one of these areas of interest, especially with residents of St. Petersburg. Russians buy housing near the border as well as in the costal areas in the south east of the country.
"Above all, the over-inflated real estate market in Russia makes foreign purchases appear extremely attractive for those with the money. "For the same price as a run-down one-bedroom flat in St. Petersburg, you can buy a turnkey flat in Cyprus or three-bedroom fully decorated flat with built-in domestic appliances in Turkey, and the house will be close to the sea," stated one Russian property expert.
"James Gonzalez, Market Analyst at Obelisk, sees the Russian expansion into overseas markets as a logical step towards diversifying investment portfolios that, until lately, were largely concentrated within Russia.
"The recent slump in commodity markets has negatively affected Russia and with the general loss in confidence investors are experiencing in banks, Russians have been testing the international waters and finding out that investing overseas is not only profitable but also safe and reliable. Once they make the initial purchase overseas and see how easy it is, it becomes a simple process to repeat."
To your business success,
Olga Kellen, the Author of Selling to Russians, free e-book for real estate professionals
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