Do Russians rush to buy real estate in Crimea?

In recent days, there has been an understanding of the irreversibility of the political process in Crimea. The sharp increase in interest in real estate on the peninsula among Russians is due to the fact that many wanted to buy real estate before prices rise sharply. Indeed, the Russian government has already promised significant investments in the development of the region, which creates the basis for a stable rise in housing prices. However, at the moment the situation on the real estate market remains uncertain. Is it worth rushing to buy real estate or is it better to wait until the risks are minimal and the legal side is clear and reliable? Price Predictions Those who are afraid of not catching up to a hypothetical rise in prices should heed the opinion of experts. According to estimates already expressed in the media, the volume of demand for real estate in Crimea in the near future will not only not increase, but may even slightly decrease. According to Macon Realty Group, published by Gazeta.ru, the main demand for real estate in Crimea was formed by Ukrainian (50-55%) and Russian buyers (35-40%). Thus, after the final entry of Crimea into the Russian Federation, one can expect that the demand of Ukrainian residents will drop to almost zero, which will temporarily compensate for the growing demand among Russians. Also, the rise in prices will be limited by insufficiently developed infrastructure and the quality of resort real estate in the region that does not correspond to the world level. In addition, in connection with the recent news about the intention of the Ukrainian government to introduce a visa regime with Russia, transport accessibility may decrease. All these factors do not contribute to the rapid rise in prices. Therefore, you should not expect an immediate jump. Registration of real estate Another reason not to rush to buy now is legal uncertainty. In accordance with the agreement on the annexation of Crimea to Russia, signed on Tuesday, a transitional period is in effect until January 1, 2015, during which integration issues must be resolved. It is assumed that after its completion, the Crimean real estate market will operate according to Russian standards. However, no specific legal action has yet been taken in the real estate sector. At the moment, transactions for the purchase and sale of real estate on the territory of Crimea are not being carried out. Realtors and notaries working in Crimea, with whom HomesOverseas.ru managed to contact, could not say when the transition period would begin and declined to comment. The State Registration Service of Ukraine (Ukrgosreestr) has not been operating in Crimea since March 17, and regional departments do not have access to the database of real estate ownership rights. Thus, there is a great risk of real estate fraud in the current situation of uncertainty. HomesOverseas.ru provides expert opinions on how the Crimean real estate market will develop in the future. Nikita Makarov , an expert on the overseas real estate market, born and raised in Crimea: “There will definitely be a transitional period, during which all real estate must be re-registered in accordance with the laws of the Russian Federation. This process will take more than one year. At the same time, the situation in Crimea is now more interesting than ever for investment. Crimea at one point became one of the developing regions. As practice shows, investing in such regions is the most interesting, since you can earn quite seriously on the increase in prices at the time of increased demand. A huge number of Russians have been buying real estate in Crimea for many years - they are building houses, hotels, etc. The Crimean peninsula has an excellent location, magnificent nature and a very mild climate. At the same time, there is no language barrier here. Now, when large investments in Crimea are really planned, and in the shortest possible time, ordinary Russians have a great opportunity to purchase a house on the seashore and in the long term (about 5 years) also significantly gain in price. I do not think that there will be a sharp rise in real estate in Crimea now, but I am sure that in a few years prices will grow steadily. At the moment, Russians, who have already traveled enough to many countries of the world, may face a shortage of housing in Crimea, corresponding to the international level, since construction has not been carried out so actively in the past few years. At the same time, there is still an opportunity to choose interesting apartments for yourself at very reasonable prices. " Alexey Golubovich , member of the board of directors of One Baltic Investment Group, a development company that sells objects on the South Coast of Crimea: “The market has temporarily stopped because real estate transactions are not registered. Prices have not fallen and, according to the reviews of local realtors, we should expect an increase in prices in Yalta and the surrounding area, due to an increase in the influx of Russian buyers, including corporate ones. At the same time, there are few ready-to-move-in properties on the coast, and any increase in demand will undermine prices. Moreover, given the strictest foreign exchange controls and the weakness of the banking system, high-quality real estate is the only way to save money. Resort real estate in Crimea can be conditionally divided into three types: boarding houses and hotels, "mass" inexpensive apartments in seaside cities and a small segment of premium class apartments. Inexpensive apartments in seaside cities are used for recreation, some are rented. Prices for quality apartments - from 1400 to 2500 USD per square meter (without finishing), depending on the location. The quality is at the level of the average Russian, but the price is, on average, half as much as for similar apartments on the Russian Black Sea coast. Among the premium-class apartments, there are more than 10 projects with a total number of apartments of less than 1000, if you count the old, but not completed (actually “frozen” since the 2008 crisis). Completed projects are mostly sold out. Apartments are usually sold fully finished according to European standards (including kitchens, bathrooms, household appliances), at an average price of $ 5,000-6,000 per square meter. The dynamics of the real estate market in these sectors in 2013 was very different. For example, prices for premium class apartments were growing due to the lack of quality objects - there are no more than 300 ready-made apartments on the market, including unfinished ones. This is not enough for a country with a population of 45 million people, especially since more than half of the most expensive apartments in Crimea are bought by Russians, as well as residents of such CIS countries. Daniil Burygin HomesOverseas.ru