Rich Russians set sights on Spanish homes

With the financial situation in Russian holiday home hotspot Cyprus looking increasingly dicey and Spanish property prices in freefall, more and more rich Russians are eyeing up a move west to Spain.

Rich Russians set sights on Spanish homes
Cashed-up Russians see Spain's coasts as safe and cheap. Photo: Frank Kovalchek

Russians are snapping up luxury villas surrounded by lush vegetation along Spain's rugged Mediterranean coast, drawn by a mild climate and relaxed lifestyle.

At the same time, they are helping to prop up the country's ailing economy and housing sector.

One of the places Russians have their sights on is Platja d'Aro (Playa de Aro), a beach town on Catalonia's Costa Brava.

The number of Russian residents in this town of around 10,500 residents, has tripled since 2004 to 575.

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," said Juan Santiago, whose real estate firm JS Platja d'Aro has worked with the Russian market during the past eight years.

"Right now about 90 percent of sales in Playa de Aro are to Russian speakers, whether from Russia, Kazakhstan or the Ukraine," added Santiago.

"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 said.

Russians bought 2,399 homes in Spain in 2012, mainly on the Mediterranean coast, 50 percent 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 percent.

"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.

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."

And 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.

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