Myths of Catalonia: cheap housing, mortgages for the Russians and profitable banking property

Catalonia is not quite a Spain. It is prestigious to own properties here, as prices during the crisis years fell there not as much as in the other regions. Natalia Lazenkova, General Director at EHR (Barcelona), dispels myths about cheap Spanish property and tells ee24.com readers about promising resorts, where the Russians like to settle.

– It is not the first time when we come to the exhibition in St. Petersburg, in order to provide the Russians with the correct information. Internet is full of false information about the objects, their value and purchasing process, – says Natalya Lazenkova, with whom we talked at exhibition in St. Petersburg in the spring 2014.

– What myths you dispel more often?

– For example, in Catalonia there are no objects for €50,000 at the first line of the sea beach. Objects for €100,000 that may be found on the Internet at Idealista and other sites are mostly the real estate for poor Spaniards and cannot be purchased by non-country residents, which is not mentioned on these sites. These are protection programs of the Government of Spain for poor people. These are also objects located far away from the sea, in some cases even in buildings requiring major repairs, etc. And the Russians say, we’ve seen in the Internet that such prices exist! I'm not saying that there are no offers for such price, but it's either a studio or a maximum one-bedroom apartment and not on the first line of the sea beach, but at least 5-10 minutes away by car.

The second myth is that the commission is paid by the buyer. Spanish agencies work in accordance with the Spanish system. This means that the commission is taken only from the seller. Buyers probably may pay for some extras but without commission taken.

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"There are many regions in Spain, where prices have decreased, but not in Catalonia"
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In Internet is also written that real estate prices in Spain decreased by 50%. Actually that happened in most Spanish regions, but not in Catalonia as in Barcelona and at the coasts of Catalonia real estate prices fell by 20-25% maximum. Interesting liquidity real estate in Catalonia is always highly-prized and it is now – the best time to purchase housing in the region. Moreover there is already a shortage of good objects in the center of Barcelona.

– What the Russians are usually interested in?

– Russian clients ask about real estate in the heart of Barcelona or about houses and apartments at the coasts of Catalonia. Recently appeared people who come often and are already looking for houses and townhouses in areas remote from Barcelona and the coast. And, it is true that there are good options located just 5-10 minute by car away from the sea and also much cheaper than, say, a second or third line of the sea beach.

A typical real estate purchase in Catalonia for the Russians is to buy seasonal housing residence or one for renting. Tourist apartments are in demand: you may stay here yourself or lease it. Such apartments are looked after and maintained in a clean and tidy. If you lease an apartment in Spain permanently, profit margin is 4-5% but without any risk. Apartments in Catalonia will never become cheaper and you'll only make a profit.

– How much is real estate in the heart of Barcelona?

– Nice apartments in Barcelona city center cost from €250,000-280,000 to €1-1.5 million. In the first case it will be a one or two-bedroom apartment with area of 60-70 sq. m. I’d like to note that in 2007 for €250,000-280,000 could be purchased only apartments on the outskirts of Barcelona, ​​and now we may find a good offer in the city center. Liquidity of Barcelona could be explained by the lack of areas for development. All that could be built is already built, and there are no new complexes. Sometimes old buildings are completely remodeled and only a facade remains the same.

– Where to buy an apartment in Barcelona that generates income from the lease?

– For example, in the Eixample district or the district of Raval. Basically, it's the whole center within 1.5 km away from the Passeig de Gracia. There was no crisis as such in the center. Compared with 2007 prices have fallen by 20-25%, with good options have been sold long ago. Search of good real estate in Barcelona is constantly complicated.

– And what is the price level at the coast?

– Apartments in Costa Dorada with one or two bedrooms cost from €130,000. Costa Brava is a bit more expensive, the same is sold here from €150,000-170,000, but it is better to focus on €200,000-250,000.

– Do the Russians have favorite city places at the coast?

– Of course, and we are those who recommend them to our clients. It all depends from the purpose: will you come there from time to time for vacation, will you lease an apartment or will combine both options. Although today clients become smarter they have visited Spain for several times and know what they want, that makes us happy.

Lloret de Mar or rather its area "Fanals" is considered to be a good place as it is quiet, new, good and not very expensive area, where we have an apartment for sale from the builder and the secondary housing market options as well. Playa de Aro is supposed also to be very elite. Furthermore, Begur – it's very elite place among all tourists not only the Russians, but real estate there is more expensive: houses and villas but not apartments.

At Costa Dorada people are acknowledge with Tarragona, Salou and often ask about them. We are very pleased that customers became more trained and give real requests for specific locations. It started a year or two ago and we have been working for more than eight years. Previously, we were asked about "advise – suggest" and now: “We want a certain area and for a certain price”. Spain is not an exotic country any more as it used to be 10 years ago. It started three years you that you can get Spanish visa without any problems and our customers say that for real estate owners visa is given for two years.

– Does it happen that the Russians ask for "Russians free" places?

– It happens. But rather it’s not about "Russians free" but about calm and “noise free” places. There are resorts where you will never manage to fall asleep. Someone say that have come just for the holidays and prefer to live in the center of events. Catalonia is convenient as «quiet" and "noisy" places along the coast change one another. We recommend purchase a house in a quiet location, 5 minutes away from the center of all events.

– Who else among foreigners purchase real estate in Spain in addition to the Russians?

– Our main customers are the Russians. But there are also the French opening a business in Spain, a country with lower taxes and a better climate. If taken as a whole, then the demand among the Chinese is also high. But for them it's not just a property purchase but a residence permit also matters. This wave began with the enactment of the "golden visa" in 2013.

– Is it difficult for foreigners to get a mortgage in Spain?

– Speaking of Catalonia, it is quite difficult, so it is better not to rely on it. You need to leave a deposit, but the Russian real estate doesn’t suite: in case of emergency the Spanish bank will not be able to pick it up. Although we have recently proceeded negotiations with banks about the possibility of mortgage loans for our customers.

– There are a lot of news about the alleged cheap banking property in Spain. Will purchase from the bank be profitable?

– We must realize that free cheese is only in a mousetrap, although it is not free, in any case we are talking about real estate with the cost starting from €60,000. Really interesting options from the bank are already sold out; most of them are bought by investors.

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"Free cheese is only in a mousetrap. But in our case even that it is not free"
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Good, liquid object will never be sold cheaply. Several banks in Catalonia offered us their property but we did not manage to find objects that might interest our customers, it's either located very far from the sea or in unknown cities where no one will ever go. We would be happy to sell the banking real estate, but, we did not find anything interesting there for ourselves.

– What are your outlooks for prices in 2014?

Today in Barcelona we see a slight rise in prices, according to the statistics it is only 0.8%. There won’t be any dramatic changes during the year, just increase by 1-2% is possible.  The situation is expected to change in the autumn if the banks will give a mortgage, the Spaniards themselves will start to purchase, demand will increase and prices will follow. Now they do not buy not because they do not want to, but because they cannot. The banks have more money that may be allocated to the mortgage. But it is better not to wait. Good offers are less and less with each passing month. If you want to buy a real estate, you know the place and everything prepared so go ahead.

Fortress served as protection against Napoleon is for sale in Latvia

Svetlana Smirnova, project manager at construction company Šafrans (Latvia), told ee24.com about the possibilities opening up for investor when purchasing historic buildings on the territory of Daugavpils (Dinaburg) fortress in southeastern of Latvia built in early XIX century.

– We heard that you are selling a fortress in Latvia...

– Well, not the entire fortress, of course! Our company owns several buildings in the historic district of Daugavpils – second largest city in Latvia. Here is a unique historical site, monument of fortification art – fortress, founded in 1810 by Emperor Alexander I and served as a defense against Napoleon's troops. By the way, there is a version that our fortress was the reason why Napoleon did not go to St. Petersburg. Today we are looking for investors to restore these buildings and further use them for commercial purposes. Currently buildings have partially decayed since ceased to be used (in Soviet times fortress housed Military Aviation School).

Left: Svetlana Smirnova, project manager at construction company Šafrans (Latvia)

– It is clear that the fortress is a city symbol, but why should investors pay attention to it, not to new areas or business center?

– The project is very promising, since many tourists choose Daugavpils as the final destination of their journey. Last year at the fortress was opened a Mark Rothko’s Art Center named after famous artist, representative of abstract expressionism. There are plans to open a zoo near, and the fortress itself is the very attractive touristic site. In addition, there are residential buildings in the territory of the complex. Daugavpils (Dinaburg) fortress is included in the temporary UNESCO list and may become a part of a permanent list along with other European fortresses.

– What difficulties may the investor face when reorganizing the buildings?

– Investors will be obliged to save the historic facades. This is not so bad, and many building owners in many historical cities go through this. St. Petersburg is one of such examples. There is an obligation to follow facade painting recommendations and to save some decoration elements, but actually that limitations are not big enough to become a serious obstacle.

A house in Daugavpils (Dinaburg) fortress

– What are the variants of buildings usage?

– After the restoration the building may be rented out for self-administration needs or for government use. There are ideas to move the city administrative offices into a fortress. You may use the building for commercial purposes: restaurant, casino, boutique hotel or hostel.

– What are investments required and what will be a yield?

– Building inhabited by staff officers, on the main fortress square, for example, may be used for commercial or administrative needs. Object area is 1770 sq. m. with a cost of €315,000 and further investments of approximately €180,000, the costs may return in 4.7 years – is rent minimal cost is €5 per sq.m.

Maybe our offer makes an interested for those who care about architecture or military and who want to give a new life for the place closely associated with the history of the Russia. Daugavpils is a Russian-speaking city, where up to 80% of people either speaks or understands Russian.

Former gunpowder warehouse, Daugavpils (Dinaburg) fortress

– What else does your company do, in addition to this project?

– We work mainly in Daugavpils and construction is our main activity. We have already implemented many projects with a European co-financing. We build and reconstruct, install network systems, construct engineering systems, install equipment and so on. Speaking specifically about this project, we are ready to help the customer to get a residence permit in Latvia, as well as provide services for the design and reconstruction of buildings acquired.

– As for the residence permit, then Daugavpils is among those cities where a minimum amount is €143,000?

– That's true, but the Latvian distances offset this difference. For example, I live in an area where the residence permit is "cheaper" (€71,500 – comments ee24.com), but the trip to the "expensive" city center, takes me only seven minutes.

– In what mood were you going to an exhibition in St. Petersburg (interview took place in Property Show in April 5, 2014 – comments ee24.com), what were your expectations?

– This is our first show and a new format for us. We were ready for any outcome. It’s strange that Latvians are almost absent here. Our project is unique, we clearly understand that it is non-mass market, but may be here is that one person who will be interested in this proposal.

Crete is well promoted but still affordable

Natalia Spigt, marketing director of NIMAX INVEST Building Management, is speaking about prices for real estate in Crete, about cost of land and restrictions on construction, about minimal budget for buying an apartment with a decent finishing, as well as the fear of the Russians to buy non-existent housing - in an interview for the portal ee24.com. 

- At this exhibition we have seen several companies offering Crete. What is unique about your properties? 

- Crete is the southernmost point of Greece and the most popular tourist destination. Many companies in Russia can offer to buy property in Crete, but we are the only company that is based in Crete and comes to Russia to exhibitions and brings its own properties. Thus, an exhibition for us, as actually for other developers, is an image component, we practically get no clients from here. Our eight-year experience of participation in almost all such events in Russia confirms it. There was an idea to completely abandon exhibition activities, but since nobody represents Crete, such decision would be wrong.

2013 was a turning point for the real estate market 

- How high is foreigners’ demand for property in Crete? 

- Three years ago, there were limitations on the purchase of real estate in the border areas of Greece for citizens from countries outside the European Union. Crete was one of these areas. Purchasing procedures dragged on, you had to wait for permission from the Ministry for 6-10 months, and it frightened people away. Crete was virtually "not promoted" in Russia then.

Now, the whole policy of the Greek government is aimed at attracting foreign investors and it is planned to make Greece a country of year-round tourism. This year there was a very strong growth of tourist flow to Crete.

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"In terms of sales, summer was successful, the demand started to grow"
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In terms of sales, summer was successful, the demand started to grow. It was influenced by abolition of restrictions on the purchase of real estate in Crete and by overcoming the consequences of the economic crisis in the world in general and in Greece in particular. Now the market is just starting to grow. 2013 was the first successful year, and I think 2014 will be even better. In Crete, by the way, prices have not fallen much, compared to mainland Greece. Houses and apartments on the secondary market became cheaper, while the cost of land with good location remained almost unchanged.

Land - the main treasure of Crete 

- What prices for housing in Crete can be called adequate? 

- It depends on location. Properties for less than €1,500 per sq.m are likely to be from old housing stock. Properties that are closer to the sea are more likely to cost more than €2,500 per sq.m. Adequate price for new housing on 2-3 line to the sea is €2,000-2,300 per sq.m in average. You can spend the same amount if you build a house yourself. By the way, it is very important that in Crete you can buy and register a plot as an individual and annual land taxes are lower than average in Europe.

Almost all land in Crete is privately owned. The state mainly owns roads, airports, mountain peaks and a small percentage of land. Moreover, in Crete there are very severe restrictions on building possibilities. Therefore, the cost of land depends not only on its size, but also how many residential meters you are allowed to build. For example, 2-3 ares in a village can cost as much as 20 ares outside the village. We should clarify that in order to build a house of 200 sq.m outside a village you will usually require at least 40 ares of land.

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"In the secondary market prices are €1,500 per sq.m in average" 
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If you build your own house, the lowest price that you can count on is €1,300-1,400 per sq.m. The only exception is an apartment constructed of prefabricated blocks: prices can be lower because the cost of construction is lower. But we are still discussing quality housing: for example, when there is not only a single light bulb and not only one electrical outlet per room, but a suspended ceiling with lighting and 5-7 outlets in the room. If you build good housing, €1,000 per sq.m will not be enough.

- €50,000 - is it the minimum amount that you should have to purchase a property in Crete? 

- Of course, you can buy a small old house for €20,000-25,000 in the mountains, but the prospect of living as a hermit in a small village does not fit many people, everyone wants to be closer to the sea. In general, we focus on different requests. For example, often there are requests for inexpensive properties in Crete for €100,000-150,000, with living space of about 70 sq.m, in a complex with full service near the sea. We are developing such offers, as well as projects for other requests as well: houses for €160,000-250,000 and €250,000-350,000.

- How much do finished apartments cost in Crete?

- In the secondary market prices are €1,500 per sq.m in average. Small studios from the old housing stock can be found even cheaper. But in tourist areas where rent is popular, prices are much higher. For example, studios of 33 sq.m, which we offered for €50,000, were sold out quickly because these investments will pay off quickly. Prices for apartments in a good complex in a nice tourist area (for example, in the area of ​​Hersonissos), on the second line to the sea, are about €2,000 per sq.m.

But prices are higher in "De Luxe", a complex which we offer off-plan now, its construction will start next autumn. The cost of land on this coast before the crisis was €2,000 per sq. m., housing prices were €4,000 - €5,000 per sq.m. Now we offer to book apartments in our complex for an average cost per square meter of €3,000, and payment starts only after laying the foundation and parallels the stages of construction. It is really a low price for such project, especially in such great location. You will not find a similar place from Heraklion to Agios Nikolaos.

I want to say a few words about the uniqueness of this project. Three buildings of the complex will be built on a plot around archaeological relics: preserved Byzantine walls that were found on the plot during the preparatory earthworks. All the archeology has already been integrated in design of the complex: the courtyard and pool with sports complex are completed with an amphitheater around the ancient walls, and it came out very nice. I think that there are no similar offers not only in Crete, but probably in the whole of Greece.

The Russians are afraid to pay for what does not exist 

- Do you have many buyers from Russia? 

- We do not have a lot of Russian buyers, we are an international company, our office speaks seven languages, most buyers are from Europe. 

- What is the difference between European clients and Russian ones? 

- For example, they are afraid to buy a "project", due to negative Russian experience. For Europe buying "off-plan" is a normal practice: here is a project of the house, the buyer can slightly modify it inside, and it is built for him. In Russia, people want to see, to feel, to make sure that the house is ready. European people are not afraid to reserve "off-plan" because the price for it is much more favorable. Besides, for some reason the Russians often need apartments in Crete on the seafront, and the Europeans are not so anxious about it and prefer a sea view from a distance of 2-3 km. It is one thing when you come to have rest at sea, and quite another when you live permanently. The Russians also often ask about a mortgage in Greece. Greek banks are now reluctant to give it, the procedure is quite complicated, you need to provide a lot of documents. But we have an opportunity to sell our properties in installments during five years at about 4% per annum, with the first installment of 30-50% of the purchase price.

Offshore of all Europe: tiny taxes and giant prices

Thomas Kampfraat, Commercial Director of CISA Group (Andorra), speaks about the search for Russian buyers, wide price range and tiny taxes in the country-offshore that nestles on the border of Spain and France.

- How do you assess prospects of the Russian market? Is it real to find customers who want to buy a property in Andorra?

- Among the Russians there is a large demand for real estate, but there is a room for improvement in this regard. The country has huge potential, because our country is a true tax heaven. Here is a special banking system. I can say that during this visit we have found potential customers. Exhibition in "Tishinka" was very successful from this point of view (Moscow International Property Show. - ee24.com editor’s note). And we hope to return to Russia in spring 2014. It’s no use visiting the Russian capital more often, as here we have agents who help our customers.

- The Russian market for you: is it only Moscow or, perhaps, St. Petersburg and some other cities?

- At one time we worked in St. Petersburg, but then we decided to focus on Moscow. Russia is a very large country and for a start we will "enter" it in Moscow, where there are plenty of potential customers. Probably in future we will also work in St. Petersburg, Yekaterinburg and other cities.

- Property prices in Andorra are from €2,500 to €15,000 per square meter depending on the market segment. What do the Russians ask more often, what prices do they focus on?

- Real estate prices in the country, which the Russians ask for, are in a very wide range. Our company deals with several areas depending on type of property. You can buy the cheapest property in Andorra for, let us say, €70,000. One of departments of our company works only with luxury real estate and premium services providing. The cost of such property is up to several million euros.

- Is your target audience only wealthy Russians?

- Basically, yes. But we also offer inexpensive properties in Andorra and investment properties. The owner of these properties can get up to 13-14% per year.

- Your company has existed since 1972. What is the range of services?

- We are based in Andorra, and provide a full range of services for foreigners, including the Russians who move to this country. It means that we take care of all the documents when you buy a property, purchase or rent a car, enroll children to local schools and so on. We also do property maintenance and offer concierge service. When the customer is abroad, our employees can visit the property if alarm goes off, check the heating system, etc. If required, we can buy products and deliver them home.

- What would you say to potential buyers?

- Andorra is a safe country with a reliable banking system. On its territory you can get all services that are necessary for expatriates.

- What additional costs should you expect if you decided to buy an apartment in Andorra?

- Tax when buying property is 4.5%. All additional costs will be equal to 5-6% of the transaction amount. Costs of property maintenance in Andorra depend on area and can range from €400 - €500 up to €2,000 per year.

Not to be left with nothing: how to buy property in Bulgaria

Bulgaria is a country where practically every Russian can afford an apartment. On the one hand it‘s good, on the other hand it’s quite dangerous. How not to be left with no money, and no real estate? What nuances should be kept in mind by everyone who thinks about investing in Bulgaria? How much will the purchase and registration of property cost? Antonia Wirth, managing partner of Crystal Realty, a board member of FIABCI International answers these and other questions.

How to move to Bulgaria and not to be left without money

- Your company operates mainly in the southern Black Sea coast and offers luxury housing, commercial buildings and land, including the seafront. First of all, let’s talk about the risks of buying property in Bulgaria, as there have been some cases of cheating Russian buyers...

- Buying property in Bulgaria on the internet, by advertisements and photos, without "live" visits seems to start going into the past. Previously, these ads often lied about area, and the photos didn’t reveal the real state of things. What is going on now? It happens that at the preliminary contract execution realtors don’t say a word about an outstanding mortgage loan. And how can a buyer find out about the loan by himself? Only when he moves into his apartment, he gets a "pleasant" surprise. The seller may declare bankruptcy during financial disputes, and the bank will seize the property that is already yours, but still mortgaged, so you will be left with no money and no property. It is very difficult to help and very easy to prevent. Agree upon progress payment in the contract, and carry out redemption of interest and all significant transactions only with a notary.

Some developers delay putting houses into operation (Act 16) deliberately, especially when they have many unsold apartments. Buyers can not live at their homes, and they have difficulties in obtaining visas.

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"There is one peculiarity of Bulgaria: in the preliminary contract a notary certifies not the legitimacy of the transaction, but only your signature and the contract date. And if necessary, the purchase can be appealed in court"
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Cases when buyers can not register the property are getting more frequent. You find a perfect apartment in Bulgaria in a house under construction, sign a preliminary agreement, pay and wait until the building is finally completed. Usually at the end of the construction work you make arrangements with the developer, go to the notary and sign the main contract. But sometimes, at this stage it appears that this property (and you can already live there) has an outstanding mortgage or other encumbrances, and therefore property registration is impossible.

Sometimes preliminary agreements are signed with different people for the same property. Remember that this is only a letter of intent, and someone else, but not you, can sign the main contract and buy the property. Sometimes it is better to avoid signing preliminary contracts.

Pay attention to one peculiarity of Bulgaria: in the preliminary contract a notary certifies not the legitimacy of the transaction, but only your signature and the contract date. And if necessary, the purchase can be appealed in court, for example, at the request of the bank that provided the developer with the loan for the building. On the other hand, it is important to know for the future buyers that the preliminary contract is an obligation between a buyer and a seller.

- What is the process of buying property in Bulgaria?

- You sign a preliminary contract, then the main contract, pay the fee from 2% up to 3%, and the notary fee of 1% (but not more than €3,700).

Within two weeks after the purchase you apply for a universal identification code, submit tax information and change accounts for electricity, water and other utilities to your name. It will cost about €100. Also you’ll have to re-sign a management contract, if there is any. In complexes it costs from €6 to €15, in "usual" apartments - about €200.

And all of these costs are very low, compared to amounts that the Russians pay in Russia and in Western Europe. So everyone, including Russian pensioners, can easily buy an apartment in Bulgaria and live in this sunny country on their Russian pension.

What, where, why and for what price do the Russians buy in Bulgaria?

- You have been involved in real estate for a long time, and you often come to exhibitions in Russia. What misconceptions is it necessary to dispel when dealing with Russian buyers?

- In general, the Russians think that you can buy a cheap and quality property in Bulgaria only for €15,000-20,000. Of course, you can save money by buying from a developer, but not significantly. Also there are other myths. Some people believe that it is not prestigious to live in Bulgaria or that our country is only for retirees. People still believe that buying property in Bulgaria is necessary and possible only on the Black Sea coast. Yet we hear that in Bulgaria there is no luxury real estate market.

- Why do you think the Russians buy property in Bulgaria?

- First of all, here it is pleasant, convenient and cozy. You can communicate in Russian almost everywhere. For Russian pensioners Bulgaria is generally a favorite place, there is a program of issuing a residence permit for elderly people.

Property in Bulgaria is a good combination of price and quality. Luxury properties in Bulgaria are also available at low prices. We see that the market has reached bottom, and now the upward trend is about to start. Offers at the best places on the Black Sea coast, and especially at seafront are almost over, new construction has some difficulties, therefore, prices for apartments in Bulgaria will continue to grow, however, we’ve been watching this trend since 2013.

- What housing are the Russians mainly interested in?

- Requests range from small rural houses with a plot to luxury houses of 600 sq.m. As for commercial real estate, they also buy everything: from hotels to wineries. The Russians are everywhere and in all segments. They highly appreciate luxury and pleasure, and more and more of them discover the value of "Bulgarian lifestyle", for example, such places as golf course Thracian Cliffs in Kavarna, one of the top-three in Europe; yacht complex Marina Dinevi in Sveti Vlas, one of the European top ten; complexes Sozopolis, Anel, Santa Marina. We receive more and more requests for spa of Bulgaria, such as Sandanski , Velingrad, Hissar, Sapareva Banya where there is the hottest hot spring in Europe and also construction of a Russian center is starting there.

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"The Russians highly appreciate luxury and pleasure, and more and more of them discover the value of "Bulgarian lifestyle"
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Naturally, the most active demand is in the price range from approximately €45,000 to €60,000. The demand for one-bedroom apartments is increasing. More and more often our customers, who have already purchased a home, buy another one for their parents or buy larger houses, with a better location and better quality. Russian buyers are gradually beginning to focus on the domestic market, buying urban property, rather than apartments in complexes where you can live only in summer.

- What nationalities besides the Russians are active in the real estate market of Bulgaria?

- Clients who buy houses and apartments in Bulgaria are mainly residents of the UK, Ireland, Poland, Denmark, and Ukraine. A good demand is from Norway and Germany, as well as Lithuania and Latvia.

- What unusual requests or demands from customers have you received?

- The funniest thing I've heard is when a client said that he would not pay for the elevator, because the Russians freed us from the Turkish yoke. Or they ask to find one-bedroom apartment at seafront for €10,000.

Bulgaria: feeling good!

- In Bulgaria there is a law that provides so-called "golden visa" for buying a home that costs €300,000 or more. Is it difficult to get a residence permit in Bulgaria?

- You get a residence permit and during the first five years you update it annually. You should note that 50 out of 60 months (these five years), you have to spend on the territory of Bulgaria. After this five-year period a foreigner is allowed to get a long-term residency. You should submit an application, documents of payment of fee, passport, documents for property, income statement (not less than the minimum wage or pension) and a statement of the absence of convictions. Then you wait from 3 to 6 months and get a permanent residence in Bulgaria. And five years later you can apply for citizenship.

- And finally, about forecasts and results. What interesting has happened on the real estate market in Bulgaria for the last year? What trends will be in 2014?

- On the one hand, there are positive trends on the property market: prices as properties are getting cheaper more slowly, more buyers return to the market, the number of transactions is increasing. According to the Bulgarian National Bank, in the first half of 2013 the number of real estate transactions has grown at an annual rate of almost 30,000. There have been 110,000 compared to 80,000 for the same period in 2012. On the other hand, there have been some convulsion in the political life of the country, and it inevitably affects people’s economic activity.

We also note a new trend in demand from the Russians: purchase not for recreation, but for moving abroad. The Russians show great interest to buying commercial real estate in Bulgaria. At the moment, the best investment destinations are wineries, food industry properties, retail properties, shops with Russian goods, restaurants, hotels and land plots on the seafront. Purchase of children's holiday camps, investment in health and IT industry can also be called attractive.

Island of Crete - the conglomeration of advances

The island of Crete means the sun, the eternal summer and rich history and culture, that were reflected in myths and legends of ancient Greece. What is the difference of real estate markets in Crete and on the mainland? What are the strengths of this island in the fight for a purse of foreign buyers who plan to get a residence permit in Greece? What inexpensive properties can be purchased in Crete and why do locals not fear an influx of Chinese? To answer these and other questions portal ee24.com had an interview with Georgios Pavlidis, president of Crete Properties Developers.

– What were the main changes in property market in Greece and specifically on Crete?

– Several last years were marked by the decrease in housing prices. But 2013 certainly was a better year. The situation is stable now; interest is increasing because people see that Greece is getting over a crisis. Though, of course, prices are still far and away lower than in pre-crisis year of 2008.

– What drives Russian buyers to buy a property on Crete, what are the main reasons?

– First, Greeks have a lot of common with Russians. One of these common things is the Orthodox Christianity. Ancient monasteries can be found all over the Crete. Second, Crete is located relatively close to Russia and you can easily get there by plane. Third, we have a typical Mediterranean food that Russian people do appreciate. And of course, our sea and excellent climate also count in favor of Crete.

So the island of Crete is a unique combination of various factors such as the history, society, location and easy access, religion, cuisine and high quality of services.

Greece has a lot of things other Mediterranean countries can't offer. In particular, Greece is one of the safest places in the world. We have a great history and culture, and our country is the one of the leaders in Europe by number of beaches with Blue Flags. In the last year about 17 million tourists have visited Greece, and by a year 2019 this number is expected to increase to 21 million.

Foreigners prefer to buy apartments on the sea

– What kind of property is the most popular among the Russian buyers?

– People prefer to buy apartments in residential complexes located by the sea. Usually such properties are priced at less than €200-250 thousand. This is the mainstream market on Crete. Our company is developing an organized residential complex of 35 apartments in the south of Crete, and we believe it will get success among the Russian buyers.

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"The mainstream market in Crete – the apartments on the sea up to €200-250 thousand" 
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We've completed a lot of projects but this one is the only we currently have under development. Of course, there is a prime property market too, and luxury villas on Crete are also in demand.

– People from what countries generally buy property on Crete?

– About 60% of property buyers are come from the UK. We also have a lot of clients from Germany, whereas the Russians are approximately 2% of buyers. I'd say that the main barrier is the language, the communication. There are not many Russians who speak English. Sales may increase in case developers employ Russian-speaking staff.

– What do foreingers want from their property? What questions do they usually ask?

– First of all, they ask how to get there and how much time it takes. But of course price is also very important to them.

Greek bureaucracy works for buyers

– Many experts claim that one of the main problems in Greece is bureaucracy. Does it really take long for the Russian buyers to get all the paperwork done?

– No, it doesn't. The situation has really changed lately. Several years ago, in order to buy a property on Crete, the Russians had to obtain approvals from Ministry of Defense. Now Russian buyers can easily buy housing in Crete.

Moreover, now we have a new law on residence permit. When the Russian citizenbuys a property in Greece priced at more than €250,000, he gets a residence permit for 5 years for him and his family. Later this permit is being renewed for other 5 years, and so on. So things are much easier now.

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"Bureaucrats require a lot of paperwork, but adherence to these strict rules guarantees the legality of transactions"
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Another thing is that bureaucracy that still happens to be operates to the buyer's advantage. All the documents provided from Land Registries, Notaries and lawyers, all the papers the buyer has to make out guarantee him a good title. When you make a contract in Greece, your title is hundred per cent legal.

Greeks are urging Russians and Chinese to come

– How did the law on "golden visas" affect the property market?

– The law granting residence permit for buyers of property valued over €250,000 did affect and will affect the Cretan property market. Russia and China have become the key markets for Greece. 2013 became the year when Chinese started to buy property in Greece; there were about 15 or 20 sales. Of course, we have cultural differences and we don't have a lot in common, while cultural patterns of Greeks and Russians are quite similar.

– How do Greeks relate to foreigners? Don't they fear of Chinese?

– Greeks are very friendly people. We need investments and we want people all over the world to come and buy property in Greece.

– What do you think about prospects of Greek property market?

All the signs are that Greece is becoming a more stable country. Probably in 2014 we'll see the slight growth in property prices after 5 or 6 years of dropping. I think this year will be the year of a slight recovery, while in 3-4 years the market will be stable, and prices will start to rise.

– If you've had only one sentence to convince people to buy a property in Greece, what would you say?

– It's very interesting question. I'd say: try Greece, because it deserves this. Buying property in Greece is an excellent investment of your money.

Strong Estonia promises to increase investments in real estate

Alis Möll, chief financial officer and board member of Pindi Realia Group, told the portal ee24.com where Skype homeland derives strength to restore the Estonian real estate market, why Tallinn is always highly prized and where in the country is possible to buy a home for a mere song.

Estonia - is a small country in Northern Europe, which is distinguished by the high quality of life, favorable environment and a convenient location close to the other Baltic countries, as well as with Russia, Sweden and Finland. It's home to "Skype" and generally one of the leaders in the field of Internet development. No coincidence that in 2005 the world's first elections with Internet voting were held in Estonia.

Estonia is the first and so far the only of the CIS and Baltic countries, which reached the status of a developed economy. The real estate market is recovering  quickly and is one of the top gainers in Europe. Last year Tallinn was even named the fastest growing city of the continent in terms of real estate prices. To know more about real estate market in Estonia, the demand from the Russians and the possibility of buying cheap apartments, we talked to Alis Möll, CFO and board member of Pindi Realia Group.

- Tell us about the latest trends in the real estate market in Estonia in 2013. What's happening with prices and with interest of Russian buyers?

- The main line of market development remained the same. Given the geographical features of our country and its proximity to Russia, buying of real estate in Estoniagives a good chance to settle in the seaside city in Europe. Geographical attractiveness remains very relevant today.

Now the Russians are buying Estonian property for families to visit the country on weekends and holidays. However, there are other tasks that Russian buyers solve. Property prices in the country are constantly growing after the crisis, so that the purchase of apartments in Estonia in order to obtain rental income is really attractive opportunity.

The prices are growing an average of 10% a year. And the primary housing, which is more in demand in Estonia, has risen in price significantly. Real estate in the primary market very dependant on foreign demand. And since investors from Russia prefer to buy new housing, prices are rapidly and continuously increasing.

Russians are also buying lowcost apartments in the north-east of Estonia. It's the easy way to get multivisa. But everyone has to understand that we are a northern country, so the upkeep of property is worth €90-150 per month, while you won't be able to live there all year round.

- What's new on commercial property market ?

- Commercial real estate situated on the ground floors is very liquid asset. Buying commercial real estate in Estonia allows to save your money, get a visa and apply for a residence permit for the whole family. Profitability of commercial real estate can reach 6-8%.

Buying an apartment in Tallinn - is the protection of your capital

- Where in the capital of Estonia is better to buy real estate?

- Tallinn's Old Town, which is under protection of UNESCO, is small, but this very feature  guarantees the growth of the invested capital. After all, even when property prices in Tallinn were falling, they remained the same in the Old City. Generally an apartment in Tallinn can be bought at a price of from €500 to €6,000 per sq.m. Comfortable and beautiful apartments which do not allow to get high rents, but guarantee the protection of your capital. I also recommend new housing in the city centre. Such apartments are highly liquid assets, and they will always be in demand.

- And what about property in other areas in Tallinn ?

- There is a demand for property in areas close to the centre, along the sea coast. Here is a special symbiosis of beautiful nature and urban infrastructure. Not only apartments but also houses are offered for sale, from € 250,000 to € 650,000. The feature of the market is that all objects are sold ready for living. However, when wealthy people buy expensive properties, they reconstruct them. This is what Russian buyers usually do.

Not by the capital alone...

- Is there an interest for purchasing houses and apartments in some other regions?

- In recent years, people are not only interested in real estate in Tallinn or in the north- east of the country, but also in scenic spots located by the sea, lake or river. Buyers are looking for a secluded place where they can escape from the city. Such objects are completely ready to move in, and usually there is a hired steward, who monitors the object in the absence of owners. The popularity of such properties caused by the fact that many Russians rent cottages in Finland for holidays and seek to buy similar houses. And Estonia offers similar properties in similar climatic conditions, but at lower prices.

There are also other areas that are popular, mostly Pärnu and the area of Lake Peipus. Mandatory criteria is the easy access to the region by car or train. By the way, St. Petersburg is connected with Estonia by buses, trains and ferries.

- And what about the prices?

- In the north-east of Estonia property prices are very low. Housing can cost from €3,000 for a studio apartment. Of course, when you buy such flats there are questions that have to be answered: why do you need it and who will live there? You must ensure that it's not located in the suburbs, away from the infrastructure.

Prices are so low primarily because of migration from mining towns to other regions and abroad. People who leave are desperately want to sell their houses in order not to pay for upkeep. Therefore it's necessary to verify the apartment concerning probable debts. Typically, such objects are being bought for obtaining multivisa.

In contrast, an expensive property can be found in Ust-Narva (Narva-Jõesuu). The cost starts from €1700-2000 per sq.m. Ust- Narva is often called the Estonian Jurmala. It's close to the border city of Narva, where apartments are much cheaper, less than €500 per sq.m.

Any foreigner may buy a land in Estonia

- How difficult is it to buy a plot of land and build your own house?

- When buying a property there is no difference between the rights of residents and non-residents. At the same time , there are restrictions on the purchase of farmland and land in the border regions.

- It is known that there are entire cities where the Department of Defense has banned foreigners to buy houses

- Not in cities but in regions located on the border.

- Do not you think that this is a disadvantage of Estonia compared with Finland?

- Well, I would not say so. Non-resident may even purchase a forest, but having a permisson from officials. There is no problem but it takes time. I do not think it significantly affects the liquidity of our market. Moreover , you may set a legal entity and buy a land. Establishing a company in Estonia is quite an easy thing. It takes just 3-4 days, and most of the procedures can be made remotely via the Internet.

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Difficult mortgage and "not Latvian" residence permit

- Almost all Estonian banks is known not to give mortgages to foreigners. What's going on now?

- Yes, it is. As for rates, non-resident can get a mortage of 6% - 60% of the property value. The main criterion for the bank is the quality of the real estate, its liquidity. Bank, with whom we cooperate, gives mortgage loans to foreigners, including the Russians, it's a rarity for Estonia. This is one of the advantages of working with us.

- Does it difficult to get a residence permit in Estonia?

- Buying a home is not related to getting a residence permit in Estonia, while it's a practice of Latvia. Residence permit in Estonia is given in connection with a business, school, family ties. Purchase a commercial property and engage in economic activity on the territory of Estonia give the right to apply for a residence permit.