In the first half of 2007, interest was drawn to Spain, Turkey, the Czech Republic, and Cyprus. But our compatriots most readily purchased real estate in Bulgaria and Montenegro. The reasons for interest in these countries are clear: similarity of mentalities, cultural traditions, and also convenient geographical location. The low cost of living in these countries with high quality also attracts compatriots, experts say. 'Our clients arrive delighted with words of gratitude and comments: "a general cleaning with window washing and linen change costs only €6", "we had dinner at a restaurant for three with wine for €30",' says Yulia Titova, head of the foreign real estate department. 'The population of these countries treats ours well, there is a very favorable investment climate here,' says Anton Gololobov, head of the press service of the Inkom corporation, describing the advantages of such a purchase.
Despite the annual price increase, purchasing an apartment in Bulgaria and Montenegro is affordable for many. Buying housing in the resort areas of Montenegro and Bulgaria is profitable; land there is still undervalued, notes Andrei Zakrevsky, senior vice president of Knight Frank. 'Bulgaria is a country with a stable economy and undervalued cost per square meter of housing,' agrees Tatyana Prokofieva, development manager at DeltaRealty.
Moreover, when buying real estate in the Balkan countries, one can take advantage of interest-free installment plans. For example, when purchasing apartments worth €100,000, you can initially pay €30,000 and pay the remaining amount within a year. However, those who want to invest in real estate in the Balkan countries should hurry. If two years ago in Bulgaria it could be purchased for €600-800 per sq. m, now prices have risen from €1,000 to €2,000. In Montenegro, an even sharper jump in the price per square meter was recorded. Over the last two to three years, prices have risen from €600-800 per sq. m to €2,500-3,000.
And, according to analysts' forecasts, growth will continue in the near future. Thus, Titova believes that by 2008 prices in Montenegro will approach €4,000 per sq. m. In Bulgaria, the expert considers it possible that the average cost per square meter in apartments will increase from €1,500-1,800 to €1,800-2,000 by the next season.
The most profitable real estate from an investment perspective is located by the sea: at the resorts of Sunny Beach and Golden Sands in Bulgaria, in the Budva Riviera in Montenegro. For lovers of quiet and picturesque places, experts advise paying attention to Sozopol and Balchik in Bulgaria and the Bay of Kotor in Montenegro. But it should be taken into account that under current legislation, foreigners cannot buy land in Bulgaria and Montenegro. When purchasing a villa, the land is either leased, or the buyer is forced to register a legal entity.
'The optimal investment scheme is to invest in modern real estate at the initial stage with subsequent rental. Thus, you get a stable seasonal income, acquire a good place for your own vacation, and reliably protect your investments,' says Gololobov. According to Titova, rental rates in the Balkan countries today are increasing in proportion to the growth of real estate prices. You can earn 4-7% per annum on rent here, the expert believes.
However, the time for making super profits from investing in the Balkan countries has passed. There is still potential for real estate growth, but the greatest profits have already been made by the British and Germans, who were 'pioneers' in investing in apartments in Bulgaria and Montenegro, says Alexander Krapin, head of the RWAY analytical center. 'A private investor who decides to invest money in the Adriatic must understand that super profits are not to be expected in the now fashionable direction. You had to take risks several years ago, when the market was just beginning to develop, foreign investors could be counted on the fingers of one hand, and houses on the coast were sold for practically nothing,' Gololobov also believes.
Therefore, analysts advise paying attention to other countries in the near future. Experts from DeltaRealty consider it profitable to purchase real estate in the capital of the UAE, Dubai. The demand for highly liquid properties in Dubai is so great that they are sometimes bought up within a few days after sales begin, the company says. Rental rates for residential real estate in Dubai allow you to earn good money. For example, a 120-130 sq. m apartment with two bedrooms, located on the second line from the sea, can be rented for $3,500 per month, experts give an example. However, the cost of real estate in Dubai also differs from the Balkan countries. In Dubai, a two-bedroom apartment on the first line with a full sea view will cost $650-700 thousand, and with a courtyard view - $400-500 thousand.
Alexander Krapin believes that now is the time to invest in Panamanian real estate. After the 2006 referendum that confirmed the reconstruction of the Panama Canal, large investments flowed into the country, the expert says. This, in his opinion, will inevitably affect real estate prices. Krapin advises potential investors to also look at the Caribbean region.
Natalia EREMINA.
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