“The Russians are coming, the Russians are coming“.
Every seller of property in Spain seems to think that the Russian buyer will be the saviour of their property sale.
However the seemingly inexorable rise of the Russian buyers of property in Spain has come to a juddering halt. They are still coming of course but just not in the numbers expected last year. There are a multitude of reasons but there is just one major one and it is not the one you may think. Take a look at the following graph.
This shows what is happening to the rouble against the Euro in the last year. The loss of value for Russian buyers is around 20% over the year meaning that many Russian buyers are changing their plans for buying, they are either waiting until they purchase or putting off their trips. (This happened in 2008 with British buyers when the Uk government effectively devalued the pound to save the economy after the financial crisis hit and the pound went from 1.50 euros to 1.06 in two months). The Russians are coming still but…
Allied to this there are two other factors. The first is the conflict in Crimea. This has had a direct effect on the value of the Rouble but also it has meant that people are wondering about how safe their investment will be as restrictions have been put in place on a group of Russian investors already, bank accounts frozen and travel bans in the EU. Some Russian buyers are worried that this will be extended to them.
Next is the thorny issue of visas. Spain is nothing if not bureaucratic and the speed of issuing visas for visiting or staying in Spain for extended periods is glacial at best. Allied to this there is anecdotal evidence that the normally glacial pace has been made even slower because of events in Crimea. Not a good sign.
On the plus side the problems in Crimea seem to have made a few people speed up their purchases as they want to make the investment to get out of any potential problems before they may happen. This is especially true of Ukranian buyers too who are looking to diversify portfolios and get out of the country as quickly as possible.
So what is our conclusion here?
Unless Spain puts out the red carpet for buyers from Russia then it cannot expect the influx of Russian buyers that was predicted. Administration, banking and more have to be better set up to serve the Russian buyers that are still coming to give them the best welcome possible.
And this is not just the case with the Russians, Arabic and Chinese buyers have the same issues when dealing with officialdom in Spain. They are treated like second class citizens by the civil servants dealing with them when they should be welcomed. Banks suspect that the money arriving is laundered even when it comes from a totally legitimate source and a bank transfer from a recognised bank.
At the Spanish Property Network we are doing our bit. Welcome to our Russian friends. There is a Russian speaking community waiting for you here in Spain with open arms.
There is also a way to avoid all of the visa problems. Buy property to the value of over 500k and the visa is granted automatically. See more at our sister site Spanish Residency.