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Stampede Into Crimean Real Estate Hits Hurdles

Russias business ombudsman Boris Titov called land ownership inCrimea a big problem.

Published: April 9, 2014 (Issue # 1805)



  • A view of the waterfront of Sevastopol. Russians have been in a rush to snap up property since the annexation but are facing administrative barriers.
    Photo: Alexxx Malev / flickr

Wealthy Russians, eager fora holiday residence bythe idyllic Crimean seaside, were burning up thephone lines oflocal real estate agencies even before Russia officially declared its annexation ofthe Ukrainian peninsula.

However, ahost ofuncomfortable practicalities not least among them thelikelihood that purchase agreements would not be internationally recognized are fornow holding themarket incheck.

Thesurge inapplications ononline real estate portal Nadezhda-Krym began about aweek prior tothe referendum on Mar. 16 inwhich more than 96 percent ofvoters inthe territory supported joining theRussian Federation, thewebsites director Nikolai Pisarkov said Monday. Military forces widely believed tobe Russian have been incontrol ofthe peninsula since late February.

Thenature ofthe applications has also changed, he added. While Russians were interested inpurchasing apartments andhouses inthe past, they are now also considering buying plots ofland forfurther development.

Over thelast two months theportal has also noted anincrease inapplications fromcertain regions ofeastern Ukraine, such as Donetsk andLugansk.

Prices onreal estate are higher inRussia, so just as inany market, people want tobuy ata moment ofcrisis andsell when theprices go up,Pisarkov said.

Some Russian firms are already seizing onto thenew market. Good Wood, acompany specializing inthe construction oflog cottages, plans toinvest $20 million inthe region over thenext two years, founder Alexander Dubovenko said.

Thecompany is opening asales office inthe region andwill begin constructing houses forcustomers with land inthe region. They are also searching forthree large plots ofland onwhich tobuild their own settlements ofcottages, which will go onsale inMay 2015.

Thepeninsulas new government is anticipating avast wave ofdevelopment as Russian business enters theregion.

We are really counting onCrimea turning intoa big construction site. We are inspired bythe example ofSochi, theregions new Deputy Prime Minister Rustam Temirgaliyev told RIA Novosti.

Many grave systemic issues persist, however, which are likely tohold themarket incheck foryears tocome.

Fornow, it is impossible tobuy or sell properties inCrimea. We cannot perform basic transactions, such as thesale ofreal estate, because we have no registration database. Kiev has blocked our access toit, Temirgaliyev said.

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ALL ABOUT TOWN

Monday, Oct. 20


Amateur pictures from World War I are on display for only one more day at Rosphotos exhibition On Both Sides, chronicling the conflict through the eyes of observers on both sides of the trenches. The price of entrance to the exhibition is 100 rubles ($2.50).



Tuesday, Oct. 21


The Environment, Health and Safety Committee of AmCham convenes this morning at 9 a.m. in the organizations office.


Take the chance to pick the brains of Dmitry V. Krivenok, the deputy director of the Economic Development Agency of the Leningrad region, and Mikhail D. Sergeev, the head of the Investment Projects Department, during the meeting with them this morning hosted by SPIBA. RSVP for the event by emailing office@spiba.ru before Oct. 17 if you wish to attend.


Improve your English at Interactive English, the British Book Centers series of lessons on vocabulary and grammar in an informal atmosphere. Starting at 6 p.m., each month draws attention to different topics in English, with the topic for this months lessons being visual arts.



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