A new Russian boom is beginning on the Spanish real estate market
As for the Russian middle class, which not so long ago bought inexpensive apartments on the coast for family vacations, it has practically disappeared from the real estate market – as the Spanish believe, due to a loss of solvency.
According to data published in mid-May by the Spanish National Institute of Statistics, the average cost of housing purchased by Russians in Spain this year is 850 thousand euros. And this despite the fact that in 2013, Russian citizens spent only 50 to 150 thousand euros for these purposes. Then they bought a record number of residential units – 3 thousand apartments and cottages. And although sales have fallen by two-thirds over the past two years, Spanish revenues from transactions with Russians have not decreased, since the property now being sold is much more expensive.
Real estate agent Hugo García Carrasco, working in the province of Malaga, said in an interview with Deutsche Welle that it is now quite possible to speak of "the beginning of a new Russian boom." According to the realtor, today's buyers are wealthy people: high-ranking officials, politicians and large entrepreneurs.
The geography of acquisitions has also changed. If earlier Russians bought apartments mainly in coastal villages of Valencia, now transactions are carried out in the most prestigious resorts – in Catalonia and the province of Malaga, the cities of Marbella, Benalmádena, Torremolinos and Mijas.
Villas are mainly purchased. For example, the price of housing in the Marbella area sometimes ranges from 2 to 5 million euros and higher. We are talking about two- or three-story houses with an area of up to 500 square meters, explained García Carrasco. Typically, such villas have a sauna, swimming pool, tennis courts, a garage for several cars, a wine cellar and a garden.
Of finishing materials, Russians prefer marble. But "the main distinguishing feature of their estates is the high fences," which neither the Spanish themselves nor other foreigners erect. Russians believe that this will ensure their safety and privacy while staying in Spain, the realtor noted.
Russian citizens buy more expensive housing in Spain than Western Europeans, who spend on average no more than 200 thousand euros for these purposes here, the expert continued. There is another fundamental difference: in the case of Russians, "it is difficult for persons not privy to the transaction to identify the true buyers of real estate." After all, it is usually registered not in the name of the person making the purchase, but in the name of one of his trusted persons: sometimes a wife if she has a different surname, a mother-in-law, or a joint-stock company.
The confusion surrounding the owners of real estate who come from Russia was also lamented in an interview by a representative of the Civil Guard (Spanish gendarmerie), Juan Carlos Perales. He explained that under the existing legislation in Spain, local security forces are obliged to keep under special protection the property of high-ranking persons – both Spanish and foreign. But in the case of Russians, according to Perales, "this is extremely difficult, given that the owners of their villas, worth millions of euros, are sometimes listed as retired schoolteachers."
Another interlocutor of the journalist, Barcelona lawyer Oscar Rivera, who provides consulting and legal services to Russians, explained the fact of registering property in the names of nominees by the fact that in Russia "the acquisition of foreign real estate is currently not welcomed, especially in the case of prominent politicians and officials." At the same time, according to Rivera, his clients do not hide that they buy housing in Spain to "protect their rear," since in Russia, in their opinion, "the current situation is unstable and the future is unclear."
According to the lawyer, people invest large sums in real estate "with an eye to permanent residence." They are also interested in residence permits, citizenship, investments in business, "to ensure a comfortable existence in Spain." All these services are provided to Russians by Spanish lawyers, various intermediary offices and financial advisors. A package of services, including, for example, a residence permit and business organization, can cost 20 thousand euros.
There is no exact data on recent investments by Russians in Spanish business, said Francisco Javier Gómez, an expert at the international consulting company Deloitte. The same regime of secrecy applies here as in the purchase of housing. Nevertheless, if we take into account data from banks that track capital movements, since the beginning of the year at least one billion euros belonging to Russians have flowed into the Spanish economy – approximately the same amount as for the entire 2015.
According to the expert, Russians invest in investment companies, construction and hotel business, port facilities, football clubs, restaurants, shopping centers, parking lots and other service sector enterprises. Despite the fact that Spain, as a member of the European Union, supports sanctions imposed on Russian banks, "capital is transferred without much difficulty." As a rule, this is done through third countries that are not EU members, as well as through offshore companies, explained Gómez.