ARCHIVED - Murcia promoters blame poor property sales to Russians and Chinese on red tape

With the Russian exchange rate suffering and economic problems at home, the much vaunted Russian market is underperforming across Spain

One of the factors which is hampering property sales to foreigners in the Region of Murcia, according to the president of the regional promoters’ association APRIM in an interview published in La Opinión this week, is that due to the importance of the military bases in the region anyone from outside the EU who wishes to buy a property here needs to obtain a military permit.

According to José Hernández, Murcia and Cádiz are the only two of Spain’s fifty provinces where this kind of visa is necessary for non-EU nationals, due to the amount of military installations they contain, and he goes on to add that so great is the problem that some property developers choose to concentrate on projects in the neighbouring provinces of Alicante and Almería instead of working in Murcia as a result. Particularly hard-hit are sales to the Russian and Chinese markets, he says, and Sr Hernández welcomes the decision made by the regional parliament recently to request that the Ministry of Defence remove this visa requirement.

The problem with the military visas is that they can take up to six months to issue, and for this reason many Russians, if offered equal properties in Murcia and Alicante, will more often than not opt for the Costa Blanca over the Costa Cálida he says.

Realistically, though, a Russian is unlikely to be offered equal properties in Murcia and Alicante: the real reason that the Russians buy more in Alicante is that the type of property on the market there is more to their liking, the whole marketing ethos of the area is geared towards attracting Russian buyers and if the intention really is to increase sales to Russia then Murcia promoters need to be looking at creating different types of product. It’s also worth pointing out that driving across the border it’s common to see billboards in Russian and walking into tourist offices, literature can be picked up in Russian, something which occurs never or only extremely infrequently in Murcia.

According to figures produced by APIRM, in the year 2013 the 1,522 new-build homes sold to non-Spaniards in Murcia represented just 13.77% of all sales, while in Alicante foreigners accounted for 40.51% of all transactions, with a total of 10,028. Certainly the difference is noticeable, but of course it’s hard to quantify the effect which would be had by the removal of the military visa requirement. Certainly the profile of these buyers is decidedly European, the British still remaining the largest market and it has to be said, that the lack of marketing of Murcia itself in English-speaking countries affects the level of public knowledge about its existence and the opportunities on offer here. There have been marked changes during the last few months, but certainly during the previous few years the lack of interest in promoting Murcia to an English speaking market at a regional level has resulted in Murcia losing out to its neighbours in Alicante. Once Polaris World stopped promoting Murcia on UK television interest dried up noticeably: look no further than airport flight statistics to see where the tail-off of inspection visits began.

The property market in Alicante is totally different to that in Murcia, and although Alicante agents are working hard to attract more Russians, the majority of Russian buyers still prefer Cataluña to Alicante. Russian purchasers are specific in their requirements, holidaymakers opting for areas close to cosmopolitan city environments, where high level branded luxury goods are available, preferring villas with sea views and pools, and tending to choose high profile leisure activities. Although the quality of Russian purchasers has started to fall in the last couple of years as they spread along the coastline into the Comunidad Valenciana, Cataluña still grabs the lion’s share of the market and developers have to accept that Murcia has a limited offering of the type of properties they tend to select.

Certainly the Chinese market is potentially more of interest to Murcian developers, and it is interesting to note that the first Chinese-partnership estate agency has recently opened in Torrevieja, specifically with the aim of bringing over Chinese purchasers.

Murcia has always attracted British, Scandinavians, Germans and the French, and many of the developments have been built with these specific markets in mind, although the predominant market here is still the Spanish themselves.

When the latest request to the Ministry of Defence was debated in the regional parliament the only dissenting voice was that of José Antonio Pujante, the sole IU-Verdes representative, who voted against the motion after expressing his worry that “the mafias of Russia and China” would be attracted to Murcia if it was made easier for them to obtain the necessary paperwork more easily.

The remaining parties felt that the benefits of trying to make it easier for non-EU nationals to buy property in the region far outweighed the potential disadvantages.