Sunday, August 31, 2014
 
Follow sptimesonline on Facebook Follow sptimesonline on Twitter Follow sptimesonline on RSS
MOST READ



PARTNER NEWS



BLOGS



OPINION



WHERE TO GO?

The Romanovs in St. Petersburg

History of St. Petersburg Museum

Small Tragedy, Fatal Passion

Rimsky-Korsakov Apartment Museum

 

  Print this article Print this article

Expats Buying Less Property

Published: June 18, 2014 (Issue # 1816)



  • There is now an increasing trend of expats selling their property, especially in the city center
    Photo: Florstein / Wikimedia Commons

Fewer foreigners are choosing to invest in St. Petersburg residential real estate, now only making up 2 to 5 percent of all real estate transactions, reports real-estate agency Knight Frank St. Petersburg.

The 1990s though to the mid-2000s saw more foreigners investing in local property, mostly to rent out. The most popular area for investment was the city center, in particular the Golden Triangle an area bounded by the Neva River, Ulitsa Gorokhovaya and the Fontanka River. However, in the last three years, an increasing of foreigners have been selling their property.

We are now seeing more foreigners who bought their apartments in the city in the 90s starting to sell, said Alla Shinkevich, deputy director of the Nevsky Prostor real estate agency. This is most likely related to the current political situation and the decrease in profitability from rent, she said.

Another reason attributed to foreigners selling and their reluctance to invest is the difficulty they face in dealing with companies hired to manage their property when they rent it out. As more of these types of managing companies enter the market, so too do the number of dishonest operators, squeezing the honest companies off the market.

It is becoming more and more difficult to find a good management company for an apartment, even for 10 percent of the apartments monthly rental rate. Ten of our foreign clients have had to sell their flats because their managing company left the market, said Pavel Pikalev, head of Penny Lane Realty St. Petersburg.

Another issue foreign real estate investors are facing is a growth in taxes for non-residents.

Foreign customers tend to buy property through a bank rather than pay cash. Even though there are some ways of getting around the legislation, the 30-percent tax that all foreigners have to pay restricts their freedom significantly, said Pikalev. As a result, it is easier to just sell the property than to deal with all the headaches.

There are two main types of foreign customers who purchase property in St. Petersburg: Residents of the former Soviet republics, including Russian citizens that now live abroad, and people married to Russian citizens.

We received several applications from foreigners this month. All of them work in different Russian cities. When I asked them why they chose St. Petersburg, I got a surprising look as a response, and they answered that Moscow was more expensive. It shows that they are not even looking at other cities for accommodation only Moscow and St. Petersburg, said Shinkevich.

While the Golden Triangle was once popular to invest in, foreigners are now more interested in newly constructed apartment buildings, and the Vasilievsky and Petrograd districts, along with Krestovsky Ostrov, are in demand, added Shinkevich.

Many foreigners are now mostly interested in newly-constructed houses built by western developers, usually by Finnish companies, Pikalev said.





 


ALL ABOUT TOWN

Sunday, Aug. 31


The Neva Delta International Blues Festival wraps up this afternoon on Vasilevsky Island with a concert featuring not only some of Russias best blues bands but international stars as well. Admission is free for all three days of the festival, which begins on Aug. 29, and the shows starting at 5 p.m. each day.



Monday, Sept. 1


Today marks the beginning of Lermontov-Fest, a fall festival celebrating the life of one of Russias most remarkable poets who, in a fate eerily similar to Pushkins, was killed in a duel at the age of 26. Organized by the Lermontov Library System, the next several months will see art exhibitions, concerts and public lectures focusing on the Lermontovs short yet prolific career. Check the Lermontov Library Systems website for more details.



Tuesday, Sept. 2


Join expats and practice your Russian during the Russian Clubs weekly meetings every Tuesday night at 7:30 p.m. The club is free to participate in although you need to be a registered member of Couchsurfing.



Times Talk