Foreign square meters in "hot spots" can put an end to your finances
The speech – as, probably, the discerning reader has already guessed – is about real estate in "hot spots." Metrinfo.ru magazine decided to travel around the globe and figure out – in which countries, where military conflicts are taking place, some desperate people manage to earn money from real estate, and whether it is worth following their example?
Abkhazia
A classic example is Abkhazia. Even people who are completely uninterested in politics, and approach the study of geography from the position of the immortal "what are the cabbies for?", learned about the existence of this country in August of last year. Looking at the map, you understand why the Georgian authorities are so worried: after seceding, Abkhazia "took with it" 60% (!) of the country's coastline. Moreover, this coastline is the best, there are resorts famous since Soviet times: Pitsunda, Gagra, New Athos. What remains with Georgia clearly loses out – for example, the outskirts of Batumi are swamps, the sea there is always murky...
How great is Russia's readiness to defend the independence of Abkhazia and South Ossetia, whether this issue could become a bargaining chip in the future – all these are political questions and clearly beyond the author's competence. Only one thing is obvious: Georgia will never come to terms with such losses, and at the first opportunity will try to regain what was lost. Under this scenario, those who have purchased real estate will definitely lose everything: it is clear that the Georgian authorities will not recognize transactions executed by the "separatist authorities." The owners of real estate (especially from Russia) will be declared not peaceful acquirers, but supporters of the separatists.
In addition to this – quite obvious problem – there is another. The current Abkhaz officials are people who in the recent past fought with Georgians with weapons in hand. They are excellent warriors, but often rather mediocre administrators. "I have seen insanely attractive offers at fantastically low prices," says Igor Indriksons, head of the department of investments in foreign real estate at IntermarkSavills. "Huge plots on the coast for 100 thousand euros – in other countries that would cost millions. But when asked about the registration of property rights, the usual answer is that in the authorities sit our guys who answer for their words. Such a 'word of honor of proper lads' as a substitute for cadastre and state registration."
On the other hand, the offers are indeed insanely profitable. According to information shared with us by the real estate agency "Country of the Soul," a two-story house in Gagra (plot of five hundredths of a hectare, house area 152 sq. m) with a garden and "cold water without interruptions" can be bought for 2.7 million rubles. And even "negotiable." In the neighboring Krasnodar Krai of the Russian Federation, the price would be at least five times higher.
As for actual sales, there is almost no information about them – it's all about the already mentioned "peculiarities of Abkhazian paperwork." But by gut feeling, deals are happening in small numbers. Mostly those who are familiar with the realities of the local market are buying.
Northern Cyprus
Real estate in Cyprus is great! Names like Limassol or Paphos have long become familiar to many of our compatriots. But besides just Cyprus, there is also Northern Cyprus – and with it, things are much less idyllic.
Since ancient times, Greeks and Turks have lived in the northeastern Mediterranean. The relations between these two peoples are well known: they constantly squabble. The first of the reliably known wars is the siege of Troy, described by Homer in the "Iliad." Until 1960, Cyprus was a colony of Great Britain. After independence was granted, the communities began, as usual, to feud. In 1974, a military coup took place on the island, and the new government, controlled by the Greeks, announced the annexation of Cyprus to Greece. The other side, understandably, could not like this – Turkish troops landed in the north of the island, and with their support the Turkish Republic of Northern Cyprus was proclaimed, occupying 36% of the island's territory.
Today, the acute phase of the conflict has passed. Numerous gateways have been made in the "Green Line" dividing the island into two parts. On the real estate market, numerous sales offers have appeared, offering real estate from the developer in Northern Cyprus, and at prices 50, and sometimes 70-80% lower than what is asked for similar properties in the southern part. But experts strongly advise against buying it.
The fact is that, according to the real estate agency "Pafilia," 88% of all land in the northern part of Cyprus once belonged to Greek Cypriots. The latter, of course, do not recognize the confiscation of this property. Moreover, the authorities in Nicosia adhere to the principle of "no contacts with the northerners" – this is manifested, in particular, in the fact that requests about whether a given property is illegally expropriated or belongs to the remaining 12% of "clean" ones go unanswered.
Those who are considering the possibility of purchasing property in Northern Cyprus will be curious to learn about the 'Orams case'. In the 1990s, Greek Cypriot Meletis Apostolidis, taking advantage of the relative normalization of the situation, came to his home village of Lapithos. However, where his house once stood, there was already a decent villa owned by a British couple, David and Linda Orams. Relying on documents issued by local authorities, they sent the persistent Pontic Greek away. Apostolidis filed a lawsuit in Nicosia, which ruled: the Orams must demolish the house and return the land to its rightful owner. They also had to pay him a one-time compensation of more than €13,000 and continue paying about €500 monthly until the property is returned to Mr. Apostolidis. The Orams, of course, didn't bat an eye. But the cunning son of Hellas remembered the 2001 EU Directive, according to which decisions of national courts are enforceable in the country of which the offender is a citizen. That is, the Orams' property is subject to confiscation and auction not only in Northern Cyprus but also in the UK. The British Themis was in no hurry, and Apostolidis appealed to the European Court of Justice. Last summer, the case was won.
At the moment, it is unknown whether this has led to any practical progress: it is well known that court cases are long, and various appeals and cassations will surely follow. But the point, I think, is extremely clear: a person who buys something in Northern Cyprus risks not only that property. All assets located in the EU could be at risk. Moreover, in this case, it will not be about local citizens, but about outsiders from distant 'mafia Russia'. With them, for example, British justice is unlikely to be as lenient as with the Orams.
Israel
Israel is a rather pleasant state in itself. The Old Testament is revered, as it is by the Orthodox. There is practically no language barrier: it is easier to ask a janitor in Tel Aviv for directions than in Moscow. And all because the Tel Aviv janitor graduated from Moscow State University, while the Moscow one graduated from Bishkek...
At the same time, purchasing property in Israel alarms many – war, explosions, intifada. But as it turns out, the fears are unfounded: Israel, though a small state, has clearly defined areas where it is dangerous and where it is not. 'There is certainly a risk of military action in the territories bordering Lebanon and Palestine,' says Stanislav Zingel, president of the international real estate agency Gordon Rock. 'But, as history shows, even during periods of intensified military action, property prices decreased insignificantly (by 5-15%), and even then, as a rule, only in these border areas.'
Moreover, the Israeli market is one of the few in the world where prices are not falling even now. A small decline occurred in 2008, but according to the results of the first half of this year, prices rose by 12%, and in July-August by another 3.5%. The overall result is a 4% increase compared to the pre-crisis level.
'The growth of the Israeli market is based on economic stability, unprecedentedly low mortgage rates (from 1.5%), a limited amount of new primary housing,' notes Stanislav Zingel. 'And also growing demand from foreign property buyers – primarily Russians and citizens of the CIS.' Not long ago, the expert continues, an event worthy of the Guinness Book of Records occurred in a suburb of Tel Aviv – a new 40-apartment building was put on the market and sold out... within 1 hour! In another case, a new complex of more than 300 apartments was sold out in less than a month.
The conflict between Jews and Arabs began, to put it mildly, not yesterday. All this time, the hottest Arab heads have been proclaiming that they will 'throw the Jews into the sea' tomorrow. So far they haven't. This means that the Jewish state is standing quite firmly on its feet.