An increasing number of Russian citizens plan to buy property abroad

An increasing number of Russian citizens intend each year to purchase property in Cyprus, Montenegro, Bulgaria or other foreign real estate even amid the global financial crisis.

It is noteworthy that the number of Russian citizens interested in property in Cyprus this year has even surpassed that of British citizens. Until recently, citizens of the United Kingdom had consistently led this type of demand for overseas property over the past several years.

Researchers' forecasts state that in 2009 transactions in Cypriot real estate will amount to 400,000,000 euros. Last year’s figures were, of course, slightly higher — but when making forecasts for transactions in Montenegro, Bulgaria, Cyprus and other foreign markets, one cannot ignore the fact that the world fell into a financial crisis.

So far this year Russian citizens have concluded the majority of property deals in Cyprus, while the share of foreign buyers has not been very large. The likely reason for this behavior is that we were repeatedly told things like “investment in property is the most successful form of capital investment.” However, with a slowdown in housing construction and a drop in the value of Russian real estate, Russian demand has shifted toward property in Montenegro.

But why do Montenegrin, Bulgarian, Cypriot and other foreign properties fail to attract the same interest from foreigners? The root cause is the economic crisis and liquidity problems. As a result, many foreigners who managed to buy property in Montenegro and elsewhere are selling their real estate. This surge of resale offers on the foreign secondary market has led to a dumping of apartment prices. This situation, in turn, has sparked interest among Russian buyers, who are particularly attentive to “cheap” offers. Today such offers are chiefly found in Bulgaria and in other countries whose main business is tourism.