In the Old World of recent events – Newspaper Kommersant No. 45 (7490) of 03/17/2023

Despite the restrictions, Russians continue to be interested in real estate in Europe. From January to March 15, demand for it exceeded the level of 2019 by 54%, and European countries accounted for almost a third of requests for the purchase of all foreign real estate. To conclude transactions, citizens are forced to transfer funds through accounts in the countries of the former USSR, obtain a European residence permit and look for sellers operating in Russian jurisdiction.

From the beginning of the year to March 15, the demand of Russians for the purchase of real estate in Europe was 5% lower than the same period in 2022 and exceeded the level of 2019 by 54%. Such data is provided by Tranio. According to their estimates, European countries formed 29.6% of the total number of requests for the purchase of overseas property. Prina.ru says that European destinations account for about 50% of foreign real estate buyers’ demand, compared to 40% before a series of earthquakes in Turkey. Anna Larina, director of the foreign real estate department at NF Group, calls the demand for European locations high.

Intermark Real Estate calls Cyprus a leading destination. Tranio points out that in January-March, the number of requests for the purchase of foreign real estate here has more than doubled year on year. Greece and France follow with growth of 41% and 29% respectively. And the demand for the purchase of real estate in Montenegro, Portugal, Italy and Germany decreased by 12-38% over the year. At NF Group, popular locations include Spain and Austria. Prian.ru notes a growing interest in Finland. The activity of Russian buyers in Europe is also indicated by the statistics of individual countries. Thus, according to published data from the Cadastral Office of Spain, in the fourth quarter of 2022, Russians formed 2.27% of transactions for the purchase of real estate by foreigners against 1.89% a year earlier.

Formally, none of the European countries, according to the editor-in-chief of Prian.ru Philip Berezin, has not yet banned the purchase of real estate by Russians, although compatriots have problems with the transfer of funds. “You either need to transfer the money to your account abroad or convince the seller’s bank to accept it,” he says. In Spain, Mr. Berezin notes, some developers help Russians with opening accounts, to which clients transfer €100,000 and pay for property in installments. Real estate in Cyprus, according to the expert’s experience, is easier to buy: funds can be transferred from Russian banks that are not subject to sanctions.

Intermark Real Estate partner Irina Mosheva points out that transactions can be paid from accounts opened by Russians in foreign banks. Financial institutions of friendly countries can be used – for example, Kazakhstan, they say in Tranio. Philip Berezin calls transactions in Russian jurisdiction another possibility, provided that the buyer and seller are inside the country, and re-registration is carried out abroad. The expert knows such examples in Bulgaria. Tranio added that according to a similar scheme, they sell real estate in their own development projects in Greece, where the seller is a company that is a tax resident of the Russian Federation.

According to Mr. Berezin, the solution to the issue with the purchase of foreign real estate was the preliminary receipt of a European residence permit (permit). Previously, real estate was purchased for its registration, reminds Ms. Mosheva. Now, according to her, a residence permit of a European state, obtained on any basis, allows you to open a bank account, accept transfers, including from Russia, and pay for transactions. Henley & Partners representative Polina Kuleshova says that now Russians can participate in the programs of Italy, Austria, Spain, Portugal, Bulgaria, Great Britain, having received a residence permit or permanent residence for financially independent applicants, investors, etc.

According to Irina Mosheva, the interest of Russians in European real estate will depend on the general situation, in particular, the situation with transfers, account servicing, flight logistics. Philip Berezin does not expect an increase in demand until the end of hostilities in Ukraine and the easing of sanctions, noting that some customers who are consistently interested in buying property in Europe remain.

Alexandra Mertsalova