European luxury real estate market stable
At most of these places investors from Russia are a steadily growing group of buyers, following some of their prominent fellow countrymen. Also some of the most prominent Russian business leaders own a second or even a third home overseas at one of the above places, constantly bringing along new buyers to their respective favorite spots. Especially the Marbella area and the Balearics in Spain and the Zurich area in Switzerland is preferred by businessmen from Russia due to the stable prices, the international environment, the international airports which offer direct connections to many places in Europe and overseas. The fact that many successful European managers and entrepreneurs own a second home there makes it relatively easy to make new business contacts. The South of France, in contrast, mainly consists of luxury holiday homes, where owners only tend to spend some weeks a year and is the attraction for celebrities from all over the world. The infrastructure is considered worse than in the Marbella area and in the Balearics and there is only one airport in Nice serving the entire area.
According to the World Wealth Report 2007, conducted by Merrill Lynch and Capgemini, there are 9.5 million high net-worth individuals in the world up from 7.2 million in early 2003, who qualify as potential buyers of luxury real estate. Though most of these people belong to the new upper middle-class in India and China, well-paid executives and entrepreneurs in particular, more and more investors from Russia decide to do significant private real estate investment in Europe.
Taking the current general economical situation into consideration, sustainable private real estate investments appear to be an interesting opportunity. The global stockmarkets are still volatile and no one expects them to become more stable within the following months. Actually, no one can predict how the financial- and banking-crisis is going to develop and which companies are still about to go bankrupt or at least, are about to enter even rougher waters. Well researched real estate investments are more than just a compromise solution to safeguard one's money against losses.
Investing in the right place in the right property will, on the one hand, still guarantee an annual return on investment, that is above average compared to earnings from interests, stockmarkets and commodities, and on the other hand nowadays is safer than any other kind of investment. All you need is to find the right location, because location is almost the only thing that matters in real estate, and the right consultants, such as the huge international chains or preferably the exclusive boutiques like Private Residences – Luxury Real Estate Group, offering high-end, individual and full service solutions including legal and tax advice at highest standards. The prices currently seen at the aforementioned places in Europe qualify as the ideal time to conduct a suitable investment now – no matter whether in the „lower priced“ luxury sector with freehold houses starting at purchase prises of around 1 million Euros or even in the „high priced“ luxury sector, where prices tend to start at about 3.5 to 5.0 million Euros up to more than 125 million Euros for selected properties in the most prestigious places.
Jens Fischer, J.D., Attorney
Finance & Legal Manager with Private Residences – Luxury Real Estate Group
