The new Russian dream - a home abroad
International real estate is fast becoming the status symbol of choice for Russia’s middle classes.
A survey by VTsIOM found that buying property abroad has leapt up to second place as a priority way of spending those hard-earned roubles.
And now almost one in three Russians has picked out foreign properties as a desirable status symbol – up from just 10 per cent in 2006.
Hungary for fresh fields
Svetlana is looking to buy a property in Hungary for her family.
And while her husband is half-Hungarian, family ties are not the only reason to move to the land of goulash and marzipan.
“The quality-price relationship is very important for our decision. It’s impossible to find a similar-priced property of the same quality in the Moscow region,” she told the Moscow News.
She’s also keen to give her daughter the best possible opportunities by giving her a toe-hold in the EU at an early age.
“Disregarding other advantages, it will give your child a chance to choose [where to live] later,” she added.
Location beats education
Indeed, such is the allure of international property that it has overtaken investing in children’s education as a popular way of investing in the future.
Meanwhile when property purchases in Russia are added, more than half the country measures wealth in square metres, with 51 per cent picking out good housing as the key status symbol.
Holiday or investment?
According to the Gordon Rock international real estate agency 40 per cent of Russians who buy abroad are looking for an exotic ‘dacha’ for holidays, and 25 per cent want a profitable investment.
And destinations vary according to the ambitions of the buyer.
“The rating of countries for investment is quite different from where Russians would like to by property for living,” Stanislav Zinger, the president of Gordon Rock, told the Moscow News. “Western Europe remains the main place for investment while the shores of Bulgaria and Montenegro have become holiday destinations.”
No end to the exodus
There’s no sign of Russians returning home soon either: this year saw a 30-40 per cent rise in demand for foreign real estate and Gordon Rock’s experts anticipate another 10-15 per cent rise next year.
The estimated value of the Russian market for real estate abroad is about $12 billion, with every second deal completed using a mortgage.
However, borrowing abroad is not always easy, with strict requirements often making it impossible to work with local banks.
This provides new opportunities for Russian banks, some of which have opened special mortgage programmes for buying overseas property.