Too-cheap real estate sales should alert the buyer
Latvia: no reason to worry?
However, there are other concerns – for example, the famous cool attitude towards Russians, everyday nationalism. The experts we asked to comment on this phenomenon unanimously laughed, and then, like Bulgakov's Professor Preobrazhensky, recommended "not reading Soviet newspapers at night." Even in Latvia, which our television declared the most Russophobic country, the reality is somewhat different. "There is no discrimination against the Russian language in everyday life and public places, and there is practically no everyday nationalism," says Stanislav Zingel, president of the international real estate agency Gordon Rock. "Latvia remains the most Russian-speaking of the three Baltic states: about 40% of the population are either Russians or representatives of other nationalities but speak Russian. In Latvia, you can get an education in Russian, Russian-language media, TV channels, radio stations, bookstores, etc. You can study in Russian both in private or public schools and in universities. Knowledge of Russian is a mandatory requirement for working in serious companies, especially in the service sector. Hotel, restaurant, and store staff treat guests attentively and respectfully, regardless of nationality and citizenship. Russian is the everyday background, on which visitors cannot be distinguished from locals."
But there are aspects where the Baltic states outperform many other countries. For example, protection of property buyers' rights. "The inviolability of the right extends to everyone – citizens and non-citizens of Latvia, as well as foreigners," notes Stanislav Zingel. "Properly registered property can be taken away from the owner only in exceptional situations by decision of the Saeima (parliament) of the republic with compensation at market price."
All data on rights is recorded in a special state register – the Land Book. Data from it is accessible to everyone, ensuring the reliability of information about owners and absolute transparency of transactions. In Latvia, there are no prohibitions for foreigners to buy real estate, including land for housing construction. Restrictions apply only to border lands, lands in the dune protection zone, as well as agricultural land and forest.
"Many representatives of the Russian elite and show business own real estate in Riga and Jurmala, on the seacoast of the Gulf of Riga and in other regions of Latvia," sums up Stanislav Zingel. Which, in our opinion, is the best illustration of the conspiracies "don't go, children, for a walk in Latvia" broadcast from the TV box…
In general, the same can be said about the other two states of our former Baltics – Estonia and Lithuania. The same European clarity of laws and willingness to welcome any buyers, even Papuans – as long as they are wealthy and law-abiding. And the huge price drop that has occurred recently (the "champion" here is again Latvia, where compared to 2007 some properties have become cheaper by more than 70%) makes the Baltic market even more promising. "Today, real estate prices in the Baltic countries are such that I would buy everything," says Peter Elam Håkansson, chairman of the board of the Swedish investment company East Capital Group. "It's time to invest in long-term investments."
Arab states and Turkey
Probably, for some, such a combination will seem unnatural. Even the countries of the Arab world have significant differences among themselves, and lumping Turkey in with them... But the fact is that for many really wonderful residential complexes being built in these states for European buyers, the definition "ghetto" is best suited. That is, sit, sunbathe, walk around the territory, swim in the pool. But it's better not to stick your head outside the fence – there is a completely different world. This is unpleasant in itself, and, moreover, leads to sad thoughts about the future: before you know it, power will change in the country, and all "infidels" will at best be evicted from their homes, and at worst – slaughtered.
As an illustration, we can cite a recent news item. As reported by RIA Novosti, Egyptian public figure Nizar Gurab filed a lawsuit against the country's Minister of Tourism Zuhair Garana. The plaintiff demands a ban on unmarried foreigners sharing a hotel room. In his opinion, unmarried men and women staying in the same hotel room is "immoral and contradicts the traditions and foundations of Egyptian society." Without being a supporter of extramarital affairs, the author must still note that we have somehow already become unaccustomed to such close attention from society and the state to our personal lives.
...However, European and Russian buyers seem not to take this threat very seriously. "The resort area of Bodrum in Turkey is extremely popular among European pensioners," says Igor Indriksons, head of the foreign real estate investment department at IntermarkSavills. "Closed hotel complexes are being built there, operating on an all-inclusive basis. 1000 euros a month – and you can live without ever leaving the gate and needing nothing. In Europe, for example, you can rent a home for 1000 euros – but that would be just housing, and everything else runs the meter. As a result, many pensioners from Europe spend six months in Bodrum – from autumn to spring."
Let us also add that at one time there was an investment boom in Dubai. Now, apartments in resorts on the Red Sea in Egypt and in Tunisia are popular among Russian buyers. Real estate prices from 40 thousand euros (i.e., completely ridiculous by the standards of our capital), sun and sea where you can swim all year round – all this makes you forget about possible dangers.
Quite exotic
Generally, investing in real estate is possible in a wide variety of countries – sometimes, at first glance, improbable ones. For example, Zimbabwe. The country is the 'world champion' in inflation – at the end of 2008 it amounted to 312 million (!) percent. The cost of a loaf of bread at the beginning of this year exceeded 10 trillion local dollars – how much bread costs now, the author honestly does not know. And there is no point in finding out – prices multiply several times over a few days. Plus the last place in the world in life expectancy (35 years), sky-high rates of AIDS incidence... It would seem you couldn't imagine a worse place for investment. Nevertheless, there are those willing.
“I know one investment fund that invested very well in land in Zimbabwe,” says Igor Indriksons (IntermarkSavills). “The strategy is to invest very small amounts – on the level of hundredths of a percent of available capital. And they acquire the best land plots. Under the current order in that country, the land will likely be taken away. But in about 15 years, when the situation probably stabilizes, it will be possible to sue for the property back. If it works out, the return will be measured in thousands and tens of thousands of percent – in hard currency, of course. If failure befalls, it’s not so bad, given that the amounts invested are small.”
Whether to invest money in dangerous markets is, of course, an individual choice. There are proponents of a conservative approach. “We do not recommend our clients to purchase real estate in ‘hot’ countries, even though they may be profitable – like any high-risk investment,” says Elena Yurgeneva, head of the overseas real estate department at Knight Frank. “Our recommendation: focus on mature markets such as the UK, France (the Côte d’Azur), Italy, Austria, Switzerland…” There are also those who actively play these markets – like the ones Igor Indriksons (IntermarkSavills) mentioned.
The only piece of advice that seems indisputable is that you can get into such adventures only if you understand the market. The risk does not disappear even in this case – but it becomes at least minimal. But buying something just because it is cheap and looks attractive is a sure path to at least financial losses.
Vladimir ABGAFOROV.
Metrinfo.Ru