Russian millionaires find an opportunity within crisis buying real estate on Catalonia’s Costa Daurada
In the current times of crisis within the real state market, money from Russian tourists is particularly noticeable. Rich Russian citizens come to Tarragona’s Costa Daurada to buy houses close to the seashore. Their search is on for "exclusive homes'' with attached land to use them as summer houses or as a base to permanently relocate to. When not using the house, they may rent them.
Cambrils (ACN) .- The sale of luxury properties in the Tarragona sea shore (South of Catalonia) to Russian tourists has become, in recent months, an opportunity for private real estate agents to sell to foreign buyers at a time of economic hardship when domestic customers are no where to be found. This possibility, together with a strong promotional campaign from the local authorities, has increased the number of Russian tourists coming to the area who want to invest money, enjoy the food and climate of the Costa Daurada, whilst staying isolated from the crisis. Housing developments such as la Llosa and Vilafortuny de Cambrils (in the Baix Camp County) which both offer luxury homes have been characterised as "ideal" for Russian investors.
The estate agent Liene K., of Latvian origin, has dedicated over three years to the sale of such property. Liene, who has worked for various real state promoters from Tarragona and has her own address book, explained that the typical profile of the Russian investors are family groups with parents aged 40 to 50 years who are not suffering economic hardship. They who want a property on the Costa Dorada to provide a holiday home during the summer, or a base to permanently relocate to.
The houses usually have four to six bedrooms and are fully furnished with no expense spared. According to Liene, who receives between 2% and 5% commission on the sale of these properties, Russian investors do not usually find it difficult to make the payments and advances, either in cash or by bank transfer, purchasing a large part of shares in the property, between 30 and 40%, at the time of booking or a few days later.
Liene explained that it is common for a customer purchasing a house of this kind to only live there for a few months. When they are not there, they normally rent them for no less than 2,000 euros per week.
Upwards of 400,000 euros
The head of the sales department of the real state vendors, Finques i Lloguers Badia, from Cambrils (on the Costa Daurada), Adriana Uilacan, said that in recent years the volume of Russian customers has increased "considerably''. Despite the economic situation, all investors hold in common private luxury homes that come with large areas of land to be able to build a pool or a large garden area. According to commercial housing prices, the average cost of such houses ranges between 400,000 euros and nearly two million euros; an amount that a Russian family was spending only a week ago in a building at Pino Alto area in Miami Platja (on Catalonia’s Costa Daurada).
Liene and Adriana explained that the length of time that it takes to complete the sales process and reach an agreement, varies depending on the needs of the customer but it can range from a month –including managing the paperwork, opening Spanish bank accounts, and several managing procedures– to up to a year and a half when it comes to a customer who has travelled several times to the area and decided to finally commit to buying a concrete property.
Beyond the real state purchase
According to Liene the Russian investor, in addition to purchasing such properties, is compelled to complete their stay by making all kinds of excursions, acquiring high-end cars or buying clothes for the first brand shops in appear in cities such as Reus, Tarragona and Cambrils itself.
Liene said that one of the last requests she received was by a Russian investor who is interested in buying a vineyard in the Priorat County in order to have their own brand of wines.
More Russians less English
The manager of the Tourist Board of Tarragona, Octavi Bono said that for the large part, the increase in Russian tourism to Tarragona is due to the ''strong'' and intense promotional campaign led by the local authorities, which cost around 130,000 euros. This is coupled with the stagnation of the English market which has allowed for the release of a large number of beds. This increased availability and opened up the possibility for operators in the tourism industry to target the Russian market.
Bono has described Russian tourists as the kind of customers who enjoy luxury during their vacations, not hesitating to make large financial investments to enjoy all types of experiences.
Moreover, the Mayor of Tarragona, Josep Fèlix Ballesteros made last Wednesday a review of Russian tourism figures within the city. Although the current total is unknown, the trend from the last two years looks promising, with 4,400 Russians visiting Tarragona city in 2009 and nearly double this number in 2010. The arrival of such tourists, said the mayor, should prompt investors across the region into considering how to improve relations between Russia and Tarragona’s province.