Stampede Into Crimean Real Estate Hits Hurdles
Russiaĺs business ombudsman Boris Titov called land ownership ináCrimea Ĺa big problem.ĺ
Published: April 9, 2014 (Issue # 1805)
Wealthy Russians, eager foráa holiday residence byáthe idyllic Crimean seaside, were burning up theáphone lines ofálocal real estate agencies even before Russia officially declared its annexation ofáthe Ukrainian peninsula.
However, aáhost ofáuncomfortable practicalitiesááŚ not least among them theálikelihood that purchase agreements would not be internationally recognizedáŚ are foránow holding theámarket inácheck.
Theásurge ináapplications onáonline real estate portal Nadezhda-Krym began about aáweek prior toáthe referendum on Mar. 16 ináwhich more than 96 percent ofávoters ináthe territory supported joining theáRussian Federation, theáwebsiteĺs director Nikolai Pisarkov said Monday. Military forces widely believed toábe Russian have been inácontrol ofáthe peninsula since late February.
Theánature ofáthe applications has also changed, he added. While Russians were interested inápurchasing apartments andáhouses ináthe past, they are now also considering buying plots ofáland foráfurther development.
Over theálast two months theáportal has also noted anáincrease ináapplications fromácertain regions ofáeastern Ukraine, such as Donetsk andáLugansk.
ôPrices onáreal estate are higher ináRussia, so just as ináany market, people want toábuy atáa moment ofácrisis andásell when theáprices go up,öáPisarkov said.
Some Russian firms are already seizing onto theánew market. Good Wood, aácompany specializing ináthe construction ofálog cottages, plans toáinvest $20 million ináthe region over theánext two years, founder Alexander Dubovenko said.
Theácompany is opening aásales office ináthe region andáwill begin constructing houses forácustomers with land ináthe region. They are also searching foráthree large plots ofáland onáwhich toábuild their own settlements ofácottages, which will go onásale ináMay 2015.
Theápeninsulaĺs new government is anticipating aávast wave ofádevelopment as Russian business enters theáregion.
ôWe are really counting onáCrimea turning intoáa big construction site. We are inspired byáthe example ofáSochi,ö theáregionĺs new Deputy Prime Minister Rustam Temirgaliyev told RIA Novosti.
Many grave systemic issues persist, however, which are likely toáhold theámarket inácheck foráyears toácome.
Foránow, it is impossible toábuy or sell properties ináCrimea. ôWe cannot perform basic transactions, such as theásale ofáreal estate, because we have no registration database. Kiev has blocked our access toáit,ö Temirgaliyev said.
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