When assessing real estate, it should be remembered that a resort "nest" near the sea will be much more expensive
The "roots" of cheapness
What is the minimum amount with which it makes sense to enter the foreign market? A precise and clear answer to this question, despite its simplicity, is impossible. First of all, of course, because different countries have different prices on their markets.
For example, speaking about cheap housing in Spain, Natalia Mishurova, manager of the overseas real estate department of the company "Gulfstream", names an amount of 35 thousand euros – that, according to her, is the price of "foreclosed property in not the best areas of Torrevieja, far from the first sea line and requiring major renovation." Somewhere in Bulgaria with roughly the same amount you will feel like a king. On the prestigious Sunny Beach, for 37,200 euros you can buy a 55 sq. m studio – it will be in a new residential complex with a pool and a children's playground, with a panoramic sea view (data from Stanislav Zingel, president of the International Real Estate Agency Gordon Rock). And with the same 35 "euro tons" to move to the French Côte d'Azur (prices start from 12-15 thousand euros per sq. m) – and we realize with unpleasant surprise that we can only afford a dog kennel.
The second point is the location of the property. Most apartments purchased by foreigners fall into the category of "resort real estate." Accordingly, real estate valuation for them takes into account parameters such as distance to the sea and the view from the window. By radically increasing the distance to the beach (sometimes 4-5 km, or even 10-15, which of course excludes the possibility of walking), we can just as radically reduce the price.
Whether you personally like it – God forbid! But it should be remembered that one of the most useful qualities of real estate is liquidity, i.e., the ability to sell quickly if needed. Objects that are "three days by reindeer" away have poor liquidity. "When buying them, you need to understand that these are very often frozen money," says Natalia Zavalishina, general director of the company "MIEL-Distant Property Management."
Another "price reserve" is related to quality. In addition to apartments and apartments in modern residential complexes equipped with all necessary infrastructure, in any country there is old and low-quality housing. "For 20 thousand euros you can find slums in almost all countries of the world, even in the USA and Europe," says Denis Evseev, managing partner of KINGSLAND. "But in this case, you are buying not real estate, but problems that will only grow over time." Low quality, by the way, can also be found in new properties – if they were built by a developer with a dubious reputation.
Finally, the problem of "quality" can concern the developer himself: choosing (again for reasons of economy) a property under construction, you can run into a construction company that promised but did not deliver. Settling accounts with such "economic entities" in court is not easy even in your home country (you are a full citizen, you know the language perfectly, you can easily get to court in an hour), and what can we say about abroad.
And the last thing about "cheapness." Abroad, unfortunately, no less than in our country, such a "form of work" as advertising with a reduced price is common. "In Antalya, some companies offer apartments for 25 thousand euros, but when people contact them, they say that the property was 'literally yesterday' sold," says Anastasia Bakulina, senior sales manager of EKOL Construction Investment. "There are only ones left for 40 thousand. I don't know if this helps them increase sales, but in my opinion, it's not very honest."
What will we buy for the minimum?
Still, what prices and in which countries can be considered minimal today? "I personally know a person who recently bought a small but very decent house near Leipzig for 15 thousand euros," says Anastasia Duderova, head of the overseas real estate department of Delta estate. "Due to work, he is often in Germany, so he will use this housing both as temporary for himself and for seasonal recreation for the whole family. If the proximity to the sea and major European cities does not bother the buyer much, then it is quite possible to find an inexpensive option in some depressed area of the country, even for 10 thousand euros."
As for full-fledged "resort" options, our experts advised focusing on amounts from 20 thousand euros. "In Bulgaria (one of the most popular countries), for this amount you can buy an apartment in Sunny Beach," says Anna Kasimovskaya, sales specialist at MostProperties.com. "Yes, it will not be the first line from the sea, but you get a full-fledged real estate property." For 30 thousand euros, the expert continues, you can buy an apartment in Thailand. The apartment will not be very large and, most likely, in a complex under construction that will be completed only in 2011-12. But you will have the opportunity to swim in the ocean all year round.
In Egypt, says Stanislav Zingel, prices in gated communities on the seashore in northern Hurghada start from $25 thousand. In Turkey, in a residential complex in Antalya (near the sea, shared and children's pools, fitness center with jacuzzi and sauna), a 30-meter apartment with full finishing will cost from $37 thousand. In Greece (Halkidiki peninsula), a 1-bedroom apartment of 50-70 sq. m in a residential complex up to 500 m from the sea costs 42-60 thousand euros.
Raising the bar
With such a noticeably larger budget, the buyer's opportunities expand significantly. You can choose real estate in the already listed countries – but, of course, these will be qualitatively different properties. 'In Bulgaria, for 70,000 euros, one-bedroom apartments (i.e., two-room by our standards) are offered 200 meters from the sea,' says Natalya Zavalishina. 'In Turkey, for this money, in some cases you can count on housing with two bedrooms.'
You can also 'expand the geography' by entering the market of other countries. Thus, according to Natalya Zavalishina, with this budget, one-bedroom apartments are available in Calabria (southern Italy). There is an opportunity to buy a small apartment in a new building on the outskirts of Prague. Studios are also available in not the most prestigious areas of German Berlin and Düsseldorf.
'In Cyprus,' notes Sergei Demchenko, development director of Lemestia Group, 'for the stated money, a one-bedroom apartment (54-60 sq m) is offered in a ready-made complex 800 meters from the sea in Paphos or Ayia Napa. Also in this budget, we can offer a small shop (60 sq m) in the Paphos area 200 meters from the sea.'
Denis Yevseyev recommends purchasing in Spain, but adds that in principle, such a sum allows buying a small (17 sq m) studio in the Alps in France. Or a bungalow in Goa or Thailand.' Ekaterina Bekarevich talks about a house in Finland or the USA.
If the price is even higher
With an even more substantial budget (for example, 200,000 euros – which, by the way, is not such a huge amount by the standards of the capital's real estate market), our horizons expand even further. In addition to 'extensive development' (same countries, only the square footage and comfort increase), you can also find something fundamentally new. For example, says Elena Yurgeneva, director of the elite real estate department at Knight Frank, in Algarve (Portugal), a new residential complex offers apartments with 1-3 bedrooms. Their price starts from 200,000 euros.
There is an opportunity to go to Italy – but not to Calabria (the cheapest region of the country today), but to a much more prestigious place, for example, Tuscany. In a new residential complex 50 km from Florence, an apartment of 60 sq m is offered. The infrastructure of the complex includes a swimming pool and a fitness center. Price – 185,000 euros.
And finally, you can go to the probably most attractive country for foreigners – Great Britain. At any rate, that is where Russian oligarchs go en masse (if that term is applicable here). Of course, 200 'kilos of euros' will not allow you to neighbor Roman Arkadyevich, but you can buy something decent.
For example, a holiday home in Sherborne (southwest of the country). The new complex is located in a quiet rural area with stunning views. Houses with 2-3 bedrooms and private parking are offered for 165,000 pounds. Or an apartment of 42-47 sq m with finishing in a new modern residential complex in the center of Birmingham – for 150,000 pounds sterling.
Don't forget about additional expenses
Traditionally, our people, having a certain 'sum X' in their pocket, believe that exactly that is what they can buy real estate for. This is driven by domestic realities, where taxes on acquisition are absent. In many foreign countries, it is different – there, when purchasing, you will have to pay significantly more than the price tag says.
'For example, in Italy or France, additional costs can be 10-14% of the property amount,' warns Natalya Zavalishina. 'This includes VAT, lawyer, notary, translator fees, etc.' 'In Cyprus,' says Sergei Demchenko, 'to the purchase price, you need to add the stamp duty for contract registration, which is 0.15-0.2% of the property value. But there is an even more significant expense: the property transfer tax, which ranges from 3% to 8% of the property value. In practice, the title is issued by the state within 3-5 years after the completion of construction, so the owner has the opportunity to save up the necessary amount.'
In general, countries differ, expenses in them also differ, and their amount can be a topic for a separate discussion. But overall, sums up Anastasia Duderova, you should be prepared to pay an additional 9-13% of the property's cost when buying.
October 18, 2010