Business environment

Ukrainians buy real estate abroad

Ukrainians buy real estate abroad
Photo: Pixabay

In an attempt to save their nest-eggs Ukrainian citizens invest in foreign real estate. No one keeps any official statistics on the number of transactions. Vice President of the Association of Professional Property Managers Anatoliy Topal says in 2014 the number of search queries for real estate abroad increased by three or four times compared with the previous year. «The demand has been actively growing even in January, which is traditionally considered to be a slow month on the real estate market,» he says. However, not all potential buyers have closed the deals.

Over the last year the rate of sale of foreign property increased by 30%, confirms Director of City Development Solutions Yaroslava Chapko. «Apartments in Turkey, Bulgaria and Spain are most popular among Ukrainians,» she says. Topal adds that besides apartments by the sea Ukrainians consider real estate in Slovakia, Germany, Czech Republic and the Baltic states.

The buyers are not even repelled by the difficulties they face in order to transfer their money abroad.

Popular acquisitions

Our compatriots are mostly interested in affordable housing priced at US $80,000 — 150,000. For example, in Turkey, apartments in new buildings are sold for US $900 — 950 per square m, and it is possible to buy one-bedroom apartments by the beach for US $80,000. In Bulgaria 44-square meter one-bedroom apartments in the new buildings with their own swimming pool areas not far from the sea can be purchased for EUR 22,500. The villas in resort towns are much more expensive: on average, they will cost EUR 300,000 — 500,000; so they are in less demand compared to apartments.

Emergency bridgehead

There are several reasons why Ukrainians invest in real estate abroad. One of them is the desire to save their savings, which people withdraw from their bank accounts. NBU Governor Valeriya Hontareva stated that in 2014 the outflow of the population’s deposits from the banking system of Ukraine amounted to UAH 126 bn, including US $9 bn in foreign currency. This is the third part of the total portfolio of retail deposits. Some of such customers invested their money in real estate in Ukraine, which, for example, led to a high demand for apartments in new buildings in November and December, and others preferred to invest in foreign property. «Many foreign developers offer property management services, so the apartment may earn its owners up to 20% annual interest in foreign currency,» says Chapko.

Yet the main reason for the observed trend is the desire of Ukrainian citizens to find an alternative place of residence in case hostilities in the east of the country spread to other regions. «Ukrainians do not hide the fact that they buy accommodation in the EU in order to obtain residence permits,» says Topal. There are several different legal schemes, which help obtain the right for permanent residence in the EU. For example, in Slovakia one will need to register a company and then sign off the purchased accommodation to the balance of such company. Based on these documents Ukrainians may get residence permits. «Last year there were cases when Ukrainian citizens opened shell companies and then developed successful businesses,» says a real estate expert, who asked not to be named.


Ukrainian legislation does not prohibit buying real estate, says Chairman of the Investment Trust Bank Oleksandr Podolyanko. Yet the biggest problem for the buyer is to take money abroad. «For that one needs an individual license from the NBU, i.e. to confirm their incomes and state the purpose of money transfers. The procedure itself takes almost a month,» he said. On condition of anonymity chairman of a large commercial bank says it is virtually impossible to obtain an individual license — the NBU is very thorough in examination of all documents. Therefore, many buyers bypass such legal requirement: quite often they transport the money for purchases of real estate «in briefcases». Representatives of real estate agencies and intermediaries are involved in such schemes. Another option is the exchange, for example, when a foreigner receives money in Ukraine through an intermediary, and buyers get it in one of the EU countries. «In fact, they exchange „briefcases“, but no one carries the money across the border,» said director of a real estate company on condition of anonymity. Commission fee for such services is 1 — 5%, depending on the amount transferred.

Still, the complexity does not scare the buyers. In future, the demand for foreign real estate will only grow, said Topal. This is due to uncertain political prospects of the country, as well as the growing frustration among business owners. Some of them are actively looking for a new country to live and work.

Comments (2)
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Алика Тамиева
Алика Тамиева 05 July 2016, 20:48

Comment deleted

Игорь Макар
Игорь Макар 03 July 2016, 13:39

Да уж, Болгария действительно стала самой доступной страной по недвижимости.