Where are russian investors really buying property?
The Black Sea Coast, Bulgaria Photo: Rubber Dragon
Russian buyers are often associated with prime real estate in London's property market, villas in Spain and Portugal or Golden Visa schemes in Europe. Algarve property website Meravista, though, reveals that Russian buyers are not looking to invest in Portugal very much at all. Their number one target? Bulgaria.
Indeed, despite widespread perception that Golden Visa schemes are helping to entice Russian investors to European property markets, Meravista reveals that 95 per cent of purchases by Russian buyers involve the buyer keeping their main house, suggesting that citizenship is not a main objective.
Holidays homes are the priority instead, although economic sanctions against Russia following the Ukraine crisis have prompted some wealthy Russians to consider relocating to the UK. The majority of Russian investment, though, is a significant departure from the mansions many might picture: the average holiday home purchase price is between €100,000 and €200,000.
Where are Russians buying property? Portugal's Algarve region is far from the most popular destination, with the majority of agents telling Meravista they had received "few or no enquiries".
Indeed, according to the Portugal Agency for Foreign Investment and Commerce, Russia is 21st out of the 55 countries making direct investment in Portugal. Russian portal Prian.ru confirms that Portugal is just 20th in the list of most popular locations, two places above the UK.
Portugal is also ranked 15th in terms of search volume for foreign property on Russian's biggest search engine, Yandex.ru. Both Prian.ru and Yandex.ru report that Bulgaria and Spain are the top two places for Russians to invest in property.
Indeed, Russia's demand for Bulgarian property is so strong that agents are now worried its market could be unstable due to the other country's dominance. The situation in Ukraine, for example, could significantly impact trends in Bulgaria's housing market. Brokers from Varna and Burgas suggest that Russia will continue to lead purchases on the Black Sea Coast, driven by the appeal of bricks and mortar in the face of Russia's weakening currency, while those in Bansko and Pomorie suggest that the complex situation between Russia and Ukraine could cause buyers to become more cautious.
Either way, one thing appears certain: sales to Russian investors in Portugal will remain relatively low.