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GUEST POST: MARIA JOSE GALVAN
I recently had the opportunity to attend this event, which, as we say in Spain, “me vino como anillo al dedo” (came in handy) for my Master's Final Project. This is about the expansion of the Russian property market on the Costa del Sol.
The "Russian Meeting Point" was held at the Hotel Holiday Polynesia in Benalmádena on 13 and 14 March in an area of about 600m2 divided into four different zones. The conference room offered presentations on selling to the Russian market, while participating companies’ stands were located in the exhibition area. These included Rosso Estate Agency, Samara Resort Marbella, Salsa Inmobiliaria, PGC Costa del Sol, Tropical Hill, Bank Repossessions and Magnum & Partners, each with its own Russian interpreter.
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The show also included round-table discussions on issues related to the initiative, such as how to sell properties to the Russian market, in front of an audience of over 70 Russian agents and investors, as well as members of the Russian Guild of Realtors (the leading industry association in Russia), with the opportunity to visit the agencies’ properties personally.
"The clear objective has been to connect Russian citizens with real estate product in the Costa del Sol and to try to sell the area's housing stock," said Enrique Lacalle, President of Barcelona Meeting Point, who added that this event model already has a proven track record, with three successful previous shows - two in Barcelona and one in Benahavis.
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"Russia is a country that is passionate about Spain, its beaches, its sun, the friendly Spanish people, and its cuisine. Indeed Russian tourism has been the fastest-growing in recent years on the Costa del Sol and has taken a significant part of the stock that is available in this area."
La Calle added that "there is a high demand from the Russian middle class for holiday homes on the Spanish coast. Spanish property is affordable for them, so this is becoming one of their preferred destinations for a second home."
"Croatia and Turkey are our main competition in this market," said José Antonio Pérez Melón, PCCS President of Barcelona, and speaker at the event. "This exclusive event is a great opportunity to sell properties by bringing potential buyers and sellers into direct contact with each other. This area has a strong future as a real-estate market."
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Jose Antonio added that "there are also Russians with strong purchasing power who don't just want an affordable second-hand home, but are looking for luxury housing of 200m2 with features such as: sea views, security, exclusivity, privacy, quality, spaciousness and location”.
At the event I asked José Antonio some questions - very useful for a student like me doing such a research project - about the different existing segments of the Russian market, the purpose of the property, types of financing, buyer profile, etc.
- What procedure do you follow to find these buyers?
- "We focus on finding different APIs (application programming interfaces) working in international markets that lead us to potential buyers, but we also take advantage of events like this to meet and greet Russian investors personally."
- Could you tell me how many Russian visitors you have worked with so far this year?
- "I can tell you that we have worked with between 40 and 80 APIs."
- What type of property do they usually buy?
- "It depends on the Russian market segment; there are different segments according to purchasing power, the end use of the property etc. But the vast majority have plenty to spend and are looking for a home of 200m2 or more, also depending on other factors - the same as we look for when buying a house: situation, sea views, surroundings, quality, spaciousness, and lastly: security, exclusivity and privacy. The intention of this market segment is to relocate here in order to educate their children, and set up a business which the wife can run, while the husband takes care of the business back in Russia."
- What can you tell me as to the age of the purchaser and housing prices? Is there a connection?
- "Yes, of course there is. The older the buyer, the more expensive the housing. Most buyers are over 40 years old, all with families."
- Could you tell me something about the mode of payment and financing?
- "Some have a mortgage, others don't. They usually pay cash because these are people with a lot of money. In Spain the banks are restricted now in terms of lending, since they will only grant a mortgage for a maximum of 50% of the house price. This is because Russians are still associated with mafia and black money, so they don’t have much confidence in this type of tourist yet. In my opinion it would be good for Spain if they changed their mentality, as this is a strong real estate market of the future."