Interest of Russians towards overseas property markets in January 2008. Analytical report.

The “Prian.ru” portal publishes its next rating of property markets that are most popular among Russian buyers. The rating is based on the analysis of more than 800 thousand visitor requests to the portal’s property listings that were submitted in January 2009.

Markets Rating

Position in January (December)	Country	Percentage of the total request number submitted in January (compared to December)	Trend Duration (the length of decline / growth)
1 (1)	Bulgaria	19,84 (–1,43)	1 month
2 (3)	Spain	8,01 (+0,95)	3 months
3 (2)	Finland	7,08 (–0,55)	3 months
4 (5)	USA	6,64 (+1,52)	6 months
5 (4)	Germany	6,61 (–0,36)	3 months
6 (8)	Italy	4,64 (+0,83)	1 month
7 (7)	Czech Republic	3,85 (–0,10)	5 months
8 (6)	France	3,41 (–0,76)	1 month
9 (9)	Egypt	2,62 (–0,59)	5 months
10 (10)	Montenegro	2,54 (–0,41)	3 months

Prian.ru comment

Bulgarian leadership in the present rating is traditionally not surprising: former so-called “16th republic of the USSR” has been a hands-down-winner during the last months. Even the decline of Bulgaria-related requests number (by 1.43%) cannot stagger the firm leading position of the present market.

Publications of analytical reports regarding the Bulgarian property market condition in 2008, which have appeared already in the beginning of January, are the reason behind such a decline. According to them, property prices in some regions of Bulgaria have started to decrease. The country has stopped being a priority destination for short-term investment. Now Russian buyers purchase Bulgarian real estate for seasonal leisure or long-term investment. 

Interest towards Spain has been on the rise since October. Latest reports conducted by the leading analytics of Spanish property market show that national real estate prices continue to decline, which means that local housing is going to become more affordable and attractive in 2009.

The stability of Finnish and German property markets does not contribute to their “prosperity” in the rating: in contrast to numerous reports and inspiring news coming from other countries, “informational stagnation” of the abovementioned states scares-off prospective customers. Investors are now paying attention to other, more volatile markets.

The growth of interest towards the US properties is supported by rumors that they have reached their bottom price. Foreclosed units which are sold with discounts are extremely popular. The supply must answer the demand: in the beginning of January, in California alone, cheap foreclosed properties have accounted for 58% of the market.

For the first time in recent months Italy has outscored Czech Republic and France. The country managed to achieve such results due to an increased demand for inexpensive properties in Calabria and Sicilia. 

Among the other changes in the second and third tens of the rating “Prian.ru” specialists highlight the declination of Greek (5 positions lost) and Israeli (9 positions lost) markets’ popularity. Political instability in Greece has affected the interest towards its property. Israeli real estate market has been loosing customers ever since the beginning of the Operation 'Cast Lead' in Gaza Strip.

Residential and commercial property

The “Prian.ru” portal also provides statistic of Russians’ requests for basic property market segments: residential and commercial.

RESIDENTIAL PROPERTY
Position in January (December)	Country	Percentage in January (compared to December)
1 (1)	Bulgaria	24,73 (–2,80)
2 (3)	Spain	8,28 (0,77)
3 (2)	Finland	7,32 (–0,15)
4 (5)	USA	6,67 (0,01)
5 (4)	Germany	5,83 (–1,60)

COMMERCIAL PROPERTY
Position in January (December)	Country	Percentage in January (compared to December)
1 (1)	Germany	20,28 (–5,00)
2 (3)	Czech Republic	8,84 (1,90)
3 (2)	Bulgaria	8,73 (–0,40)
4 (6)	Spain	8,14 (3,95)
5 (5)	France	4,81 (0,12)

The first five positions correlate with the main rating and remain almost untouched since August 2008. The only significant shift in TOP-5 (compared to August) is generated by the decline of interest towards German housing: in August and September 2008 Germany has occupied the second position, in November – the fourth.

The decrease of Russian demand for German housing is compensated by the significant interest towards the country’s commercial space. The reason behind such a spectacular popularity is the growth of condo offers number (especially in Berlin). Whole condominiums are buy-to-let units and are classified as commercial property.


Expert opinion

BULGARIA
Vladislav Kharitonov, manager of development and analytics department, Bulgarian Property Advisors: Indeed! The structure of Bulgarian demand has changed. If in 2007 it was majorly formed by investors, purchasing property in order to raise money, then in 2008 the market was dominated by the people seeking real estate for their personal use. 

ITALY
Alexey Bozhkov, CEO, Mia Sicilia:  We do register an increase of Russian demand towards the low-end apartments (priced up to $150 thousand), which are widely presented on the markets of the southern regions. More expensive units on Italy’s south are loosing their popularity among Russian buyers.  

Yulia Titova, manager of foreign property department, BEST Nedvizhimost’:  Piedmont and Lombardy are gaining more and more attention of the Russian buyers. Local property prices are significantly lower than in Switzerland or France. The growth of demand is related to Switzerland joining the Schengen States: now a buyer of a unit in any North-Italian town may freely visit Swiss resorts.

Author: Alexey Konovalov