Euro Zone Crisis

Russians snap up luxury homes on Spanish coast

PUBLISHED : Wednesday, 20 March, 2013, 1:44pm
UPDATED : Thursday, 21 March, 2013, 12:57am

Russians are snapping up luxury villas surrounded by lush vegetation along Spain’s rugged Mediterranean coast, drawn by a mild climate and relaxed lifestyle, proving the country’s ailing economy with a much-needed boost.

Sergei Maslov, 53-year-old real estate developer, and his wife Larissa, 51, from Novosibirsk in Siberia are part of this wave of Russian investors with deep pockets who are being welcomed with open arms by Spanish officials.

The couple are looking to buy a home on the Costa Brava in Spain’s northeastern region of Catalonia after spending lengthy vacations in the area during the past four years.

“Temperatures can drop to 40 below zero. So we want to come here where we have sunshine and nice weather and where we can have a great time with our children and grandchildren,” said Larissa after visiting a villa in the hills near Playa de Aro, located some 80 kilometres (50 miles) north of Barcelona.

The 700 square metre (7,500 square foot) house with six bedrooms, a giant living room decorated in a modern and minimalist style, swimming pool and a sauna that Larissa said was “a bit small” sells for 3.5 million euros (HK$35.1 million).

Located on a hill full of mansions owned by Russians, the house meets the basic requirements of this market segment: security, quiet, surrounded by vegetation and with a good view of the coast which is full of small coves.

“It’s very big and very nice. Especially the panoramic view and the location, it is quiet and safe,” said Larissa, who wore an elegant white coat, designer purse and high heels, after walking around the terrace and admiring its sweeping view of the Mediterranean Sea.

The number of Russian residents in Playa de Aro, a town of some 10,500 residents, has tripled since 2004 to 575.

“Right now about 90 per cent of sales in Playa de Aro are to Russian speakers, whether from Russia, Kazakhstan or the Ukraine,” said Juan Santiago, whose real estate firm JS Platja d’Aro has worked with the Russian market during the past eight years.

“They appreciate the fact that they can go for walks without security guards, that they don’t need a chauffeur. Here security is complete,” he added.

Russians bought 2,399 homes in Spain last year, mainly on the Mediterranean coast, 50 per cent more than in the previous year and eight times the amount purchased in 2006, according to figures from the country’s property registrars association.

The jump in purchases of properties by Spain was due to word-of-mouth recommendations and “the collapse in prices in Spain combined with Russians’ rising spending power”, said Alina Bondarenko, a Russian lawyer who has worked in Spain for over a decade.

The influx of Russian buyers has helped stimulate the property sector which has struggled since a decade-long property bubble burst in 2008, dragging down the entire Spanish economy and sending the jobless rate to a record 26 per cent.

“The Russian client has no price constraints. They are selective and they are saving the sector,” said Xavier Salvado of the Salvado&Gubert real estate firm which operates on the Costa Brava.

To attract more property buyers from abroad and help reduce Spain’s bloated stock of unsold homes, the government is mulling offering foreign residency permits to those who buy a home worth over 160,000 euros (HK$1.61 million).

Menus and signs in Cyrillic letters are common sites in the streets of the town, Russians music plays in shops and Russian newspapers are easy to find in kiosks. There is even a bar with photos of the Kremlin that serves traditional Russian food called Plaza Roja or Red Square.

“At any store at Playa de Aro you can find a shopkeeper who speaks Russian,” said Nataliya Zmeul, a 34-year-old Ukrainian who works at a jewellery shop.

“If we did not have Russian clients, the town would be ruined. We live on off of tourism, the town is a commercial centre and what is saving us are Russian clients,” added Santiago of the JS Platja d’Aro real estate firm.

The influx of Russians to Spain’s northeastern coast was thrust into the limelight in January after the former mayor of the town of Lloret de Mar, Xavier Crespo, was put under investigation for his alleged ties to the Russian mafia.

“Crime and the mafia do not affect Russians more than other nationalities,” said Playa de Aro’s town councillor for tourism, Imma Gelabert.

“If they settle in our town, it means they will boost business throughout the year.”

Many area residents hope the Russian influx will grow.

“These people are very friendly. We have no problems with them, on the contrary, it would be good if more people like them came,” said Rosalina Moreno, a 54-year-old restaurant employee.