Legitimacy of sales may nip Crimean real estate boom in the bud

Crimea’s new government anticipates the peninsula turning into “a big construction site,” as bargain-hunting Russians — mostly “young, modern people who are already wrapped up in globalization, with accounts in foreign banks” — shift their gaze from existing homes and apartments to plots of land ripe for development, The Moscow Times reports.

“Wealthy Russians, eager for a holiday residence by the idyllic Crimean seaside, were burning up the phone lines of local real estate agencies even before Russia officially declared its annexation of the Ukrainian peninsula,” The Times reports.

There are, however, a few “grave systemic issues” that “are likely to hold the market in check for years to come.”

At the moment, it’s impossible to buy or sell property in Crimea, because Ukrainian authorities have blocked real estate agencies from accessing the government’s property registration database. Eventually, deeds of ownership will presumably be registered with Russian authorities.

But Ukrainian parliament has passed a draft bill that describes Crimea as a “temporarily occupied territory,” declaring that, “Any judicial transaction regarding real estate that is made in violation of the requirements of Ukrainian legislation is considered invalid from the moment of its signing.”

As the Times puts it, “the legitimacy of any purchases will remain in question so long as the international community considers Russia’s annexation of the territory illegitimate, a factor that could significantly reduce demand among Russians.”

In a seemingly unrelated matter, a member of Russia’s ruling party who heads a Security and Anti-Corruption Committee says lawmakers should not ban government officials from owning foreign real estate. Source: themoscowtimes.com.