Closing the Season

The Moscow International Property Show traditionally organized by aigroup was held on November 13-14, 2009, at SC Tishinka. In expert opinion, the show became clear evidence that the crisis in the real estate market is being gradually overcome. A record number of visitors (around 8,000) matched a decent number of participants (172).

The exhibition season is known to be evenly split between spring and autumn. Everything normally ends in November and both participants and visitors of the shows part till March-April. Perhaps for this reason the last show of the year is thought a most responsible event gathering the maximum number of visitors.

This is what happened to the Property Show that saw 7,720 visitors during two days. It should be noted that this is a very accurate figure, since each visitor is given out a personal badge with an individual bar code; this data is read out at the entrance.

The organizers of some expositions claim incredible attendance figures but let this lie at their door. According to aigroup ’s president Kim Waddoup, “we ourselves are interested in the scoring accuracy to assess the results of our efforts”; in addition, the experts of member companies cannot be deceived: if they see the organizers are not sincere with them, they’ll certainly react.

This year’s spring session brought us to a conclusion that the international property market took the blow well and experts agree that in the fall time the sector has already overcome the crisis. Curiously enough, one of the visitors, moving alongside the stands, where thousands of properties out of almost 40 countries were displayed, dropped a remark: “Well, where do they have a crisis here?”

It’s interesting to review the nations and participants represented at the Property Show: Europe, Asia, Africa, America (North, South and Central), and Australia – the buyers could choose from numerous destinations. The figures are eloquent enough: it was possible to buy properties located in 40 different countries. As regards the companies, this year has passed under the aegis of developers.

The credit crunch forced many to freeze their projects; accordingly, real estate agents had less work on their hands and they themselves preferred not to run the risk. The companies that proved unable to continue construction chose to deal with potential buyers directly. But now at the end of the year brokers are returning to the market, taking a very proactive stance.

And now let’s talk about the most popular destinations among the Russian buyers. Throughout 2009 Bulgaria has remained an undisputed leader and at the recently held show 36 companies from this country offered attractive properties.

As predicted by Alexander Vakatov, business development director of Virtus, this destination will evoke the ever keener interest in the years to come, as the prices remain affordable and the terms of buying are very convenient. Spain ranked second in terms of representation – 27 companies operating in the Spanish property market participated in the Property Show.

Experts are positive that the main reason boosting the demand is a favorable condition of the Spanish financial system: loans are still available at rather preferential terms.

This was all quite expected, though. As for the new trends, the resurgent boom of Montenegrin real estate is worth mentioning in the first place. Mirko Latinovic, president of Tradeuniqe holding, thus explains the purchasing boom:

“Crystal clear Adriatic Sea, the riches of Montenegrin nature, high quality of construction works, reasonable prices and a very good attitude towards Russian buyers – no wonder Montenegrin properties are so popular among the Russian investors!”

It should be noted that 20 companies promoted Montenegrin properties at the Show and Montenegro graded up to Turkey, which is an excellent result. Independent experts also believe, Montenegrin real estate has very good prospects on the Russian market and confidently forecast the growing number of deals.

Olga Wolf Yucel, sales director of IPC, points to serious investments in Montenegrin economy by the leaders of Russian business as one of the main reasons behind the Montenegrin boom. It is self-evident that if the wealthiest Russians think so high of investing in this Balkan nation, this is an important sign for other investors.

As regards other leaders of consumer demand, their list did not undergo any changes: Bulgaria, Spain, Montenegro and Turkey are followed by France, Italy, Cyprus, Egypt, Greece and Czech Republic. As we described the preceding Property Show held by aigroup in St. Petersburg, we noted the activity of companies offering properties in the Baltic region and Finland.

This could be explained by geographical reasons, for buying a residence in Latvia, Estonia or Finland is not something uncommon for St. Petersburg residents – these properties are not expensive and easy to reach. Now as the last Moscow show of the autumn season is over, we can say that this is a general trend, rather than a Petersburg idiosyncrasy. The people of Baltic lands seem to have realized that they should seek buyers in the East rather than the West.

Many specialists pointed out that while some time ago only affluent people could afford buying international properties now such an acquisition is a common matter. Alongside some luxury properties, the market is also flooded with economy-class properties which can be purchased for some 50,000 EUR by middle-class buyers.

In the opinion of Stanislav Zingel, managing partner of Gordon Rock, the entry to the international property market of buyers who even fall short of the middle class by the Western yardstick is the sign of profound changes in the mentality of the Russian people and the emergence of market thinking. This is also one of the most important market trends.

Reviewing the results of the exhibition season in 2009, president of aigroup Kim Waddoup underlined that in this year the international property market corroborated its appeal and uniqueness. In his opinion, 2010 will be the first year of growth and great prospects.

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