Posts Tagged ‘property’

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Property prices – Ukraine

February 13, 2013

Every now and again I get a message from some readers who have a desire to relocate to Ukraine and I am frequently asked, amongst numerous questions, if I think the price of property will further fall or if it has plateaued.

It would seem that it is neither likely to drop any further nor remain stable.  Due to the increases in the cost of construction materials, it seems that property prices will rise between 6 – 10% in 2013.

Now you can stop asking me!

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Ukrainian Cypriot relations

August 28, 2012

The EU’s very naughty boy, the offshore tax haven of Cyprus, and Ukraine are getting ever more friendly.

Last week, the Cypriot President paid his first ever visit to Ukraine, and this whilst Cyprus is also holding the EU Presidency.

Amongst the somewhat more bizarre things to happen whilst in Ukraine, President Chrsitofias was given an honorary doctorate by Mariupol University, seemingly on the basis that Mariupol is twined with Paphos in Cyprus.  I wonder if I can get an honorary doctorate from an Odessa university on the basis it is twined with Liverpool?  It would cut out all that tedious research and thesis writing – let alone having to successfully defend said thesis.

Anyway, President Christofias has given his full and public support to Ukrainian integration with the EU last week with no mention of the on-going domestic issues regarding Ms Tymoshenko.  Something that may not go down to well given the Cypriot presidency of the EU at present.

That said, given that Ms Tymoshenko is known to have Cypriot interests and Cypriot fronts for interests, (just as she does in Czech Rep and Poland etc) and undoubtedly so do a lot of the current government, he maybe thought it better not to mention individuals with stakes in Cyprus from either side of the political line publicly.

At the same time, President Yanukovych was stating that Ukraine was seeking observer status with the Shanghai Cooperation Organisation, talking up the ratification of the FTA with the CIS, and stating that the internal affairs of Ukraine will not be subjected to EU pressure and as such if formal EU integration had to wait, so be it!

One of the very interesting things to emerge from his visit are the plans to scrap Visa fees for Ukrainians to Cyprus.

To the EU relating to migration, Cyprus not being a Schengen nation this presents few problems.  To Cyprus, it presents a massive opportunity to claim a stake in the Ukrainian tourists who head for Turkey and Egypt simply to avoid the tedious hassles in getting a Schengen Visa.  I would expect Cyprus to see a marked increase in Ukrainian visitors very rapidly indeed.

Of course it also allows for Ukrainians to visit their money and off-shore companies without problems too.  And it is not just the Oligarchy who have such companies and bank accounts in Cyprus.  A sizeable and growing number of average Ukrainians also take advantage of this, and why not when it costs only Euro 4000 to do completely legally.

It does however, also open up part of the EU to claims for asylum with relative ease for Ukrainians on EU soil, something the EU has been keen to put as many hurdles in the way of as possible.  Something else that will annoy Brussels about Cyprus no doubt!

The other attraction of Cyrus to the average Ukrainian aside for free visas, the ease of setting up off-shore companies and bank accounts and the natural beauty of Cyprus as a tourist destination, will be the absolute ease of getting permanent residency in Cyprus, and thus within an EU nation (albeit not Schengen).

Undoubtedly, the Cypriot private banks will also be rubbing their hands with glee, as whilst the Cypriot economy may very well be struggling, the private banks are awash with Russian and Ukrainian cash off-shored.  More will surely follow once Visas become free of charge and it takes its place along side Turkey and Egypt as a top tourist destination for the average Ukrainian.

Naturally I have been at pains to state “average Ukrainian” thus far, as the upper ranks of society have no issues already.

In fact in the past year, Cyprus has granted 26 citizenships “by exception” to very wealthy Russians and Ukrainians.  Possibly something for Eurpol to worry about when we consider the sources of some of this wealth to which Cypriot (and by default EU) citizenship has been granted.

That said, when one considers the Russians and Ukrainians (and their associated wealth from dubious sources)  given permanent leave to remain, asylum, or indeed UK citizenship who live in and around London, why should Cyprus not take advantage of the money these people have as well?

Those Ukrainians with money who will now see Cyprus as a top holiday destination will also no doubt consider property there – very much like Spain became for the British 20 years ago – in fact since the issue of free Visas reached the ears of my good lady wife, she has already been hitting the Internet looking at property there.

As she states, despite being married to a UK citizen for almost a decade, she is not entitled to permanent residency in the UK unless she lives there – which she doesn’t want to do – and thus has to arse about with UK Visas when we want to visit.  And as she says, for an island, the UK is quite devoid of sunshine, palm trees and welcoming seas to swim in.

Buying a property in Cyprus, getting permanent residency on an island with sunshine and inviting seas to swim in, on the other hand, for her is very simple indeed.

The abolishing of fees for Visas between Cyprus and Ukraine would seem to be a bilateral win-win for Cyprus as far as I can see.

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Structural and contents insurance – Odessa

June 7, 2012

It is not often I write something that promotes a commercial company (in either a positive or negative light) – but –

In the decade I have been here I have insured my car, every house I have built (prior to sale) and every apartment I own with the same company.  I have only ever had to claim once when a young man decided to try and park his car inside mine at a set of traffic lights.  The issue was dealt with and repairs done within 3 days between the insurance company and main car dealer.  No messing about and no problems!

Yesterday, having now moved to my rather nice place by the sea in Arcadia, it was time to insure the new home.  Naturally I went to the same company, Oranta, but not to the office I have historically used on Kosmonavtov but to the office on Fantanskaya Doroga which is now much closer to where I now live.

The good people at the office as Kosmonavtov have been the same faces for the past decade with no staff turnover whatsoever – alway a good sign – and remember me well a I am probably the only British client they have had (consistently for the past decade anyway).  I am also probably the only person who has had 4 properties insured with them in to the US$ value of millions per property simultaneously with them as well (having built them and  whilst waiting for them to sell).

Anyway, yesterday afternoon I called into the Oranta office on Fantanskaya Doroga, who are not used to me, foreigners in general, or people wanting all encompassing,  completely fully comprehensive insurance for structural and contents insurance.

When stating I wanted said insurance, the (ever so helpful as it turned out) lady promptly stated they had a deal at the moment and for UAH 75 per annum I could get such insurance that would pay out UAH 4000 in event of a problem.

I then explained that such a sum was far, far too small and stated I needed all encompassing structural and contents insurance that would run into many UAH millions.  (That is not as much as you think – Divide by 8 for US$ and 12.75 for Sterling).

“Millions?”  She said somewhat in shock whilst picking up the telephone to make a call to check that such a figure can be insured.

I then rapidly explained that Oranta did indeed provide insurance to such a sum as the Kosmonavtov office had done it numerous times historically – so she called them.

When they asked who and she told them my name, one of the good chaps from the Kosmonavtov office told her to arrange to visit me at home and they would come with her yesterday evening (and also thank me for another foreigner I had referred to them previously – something that I don’t remember doing but whoever it was went and said that I had recommended them).

A time of 6pm was arranged and quite unbelievably for Ukraine, at 5.55pm the arrived.  Not only on time but 5 minutes before time.  As a Brit, 5 minutes before is exactly on time!

Photographs, forms completed, signatures and stamps, payment and receipt made all at home (no come to the office tomorrow nonsense as is often the case here as “the company stamp” is not allowed out of the office) and all singing, all dancing, all encompassing insurance was mine at the value I had guessed at and they quoted without any prompting from me.

The cost of the said insurance?  UAH 5030 for the year.

Very hard to critise the service, the cost, or the timekeeping.  Almost as though I wasn’t in Ukraine!

Still, mustn’t grumble!

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Another good idea but with no clear implementation policy

March 4, 2012

You know how I continually highlight the Ukrainian government spouting numerous good ideas as solutions for numerous obvious problems but failing because would would be effective policy falls short on the means of implementation?

Well here is yet another good idea that will undoubtedly fail through ineffective implementation and result in being a government statement that will be counterproductive.

The Prime Minister has announced that Ukraine will introduce a 30 year mortgage at 10% interest in order to stimulate the housing market.

Now for many readers, you will think there is nothing special about that.  However you should be aware that mortgages spread over 30 years in Ukraine simply do not exist and have never existed.  A Ukrainian would do exceptionally well to find a mortgage that runs over half that time.  More often than not it is for a period of 10 years or less.

The interest rate of 10% is also unbelievably low for Ukraine.  Standard borrowing rates are typically 21% to 27% – I kid you not!

So, how will the Prime Minister, having made this statement, create a system where banks are offering 30 mortgages at 10%?

Create a Freddie Mac or a Fanny Mae?  Forcing private banks such as OTP, Aval, Alpha, Delta, Pump, Privat et al seems very unlikely.

He is undoubtedly right that banks offering such terms would stimulate the housing market and construction industries, but how is he going to achieve them doing so?

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Challenging conventional wisdom – Freedom of movement – Ukraine/Russia

December 4, 2011

You know how sometimes it is necessary to play the devil’s advocate or think laterally in order to get a better understanding of something?  At least to see an alternative view when looking through the same lens at the same issue?

Well with the Duma elections today in Russia resulting undoubtedly in a few people my good lady knows retaining their seats and October 2012 in Ukraine having the same result for people she knows in Ukraine also retaining their seat here, one wonders why both Russia and Ukraine are so keen to accomplish an agreement with the EU over freedom of movement (Visa-free) when it would expose their citizens to a far less managed style of democracy than they see at home.

(I will take a moment to say hello to my fellow bloggers, acquaintances and throughly solid citizens,  Charles Crawford and The Democratist who are monitoring said Duma elections in Moscow and Ufa respectively.)

You would think that seeing alternatives to the power vertical, effective and engaged opposition parties with alternative policies (rather than simply saying “no” when those in power say “yes” as is all to often the case in Ukraine, or vice versa), and the rule of law far more evenly applied (although not perfect), the very last thing the current crop of political leaders, both in power and opposition in some cases would want, is to expose their citizens to working alternative models of governance.

Of course both Russian and Ukrainian societies are quite well aware of the European principles and working methods and both societies spend a lot of time in cyberspace where neither Russia nor Ukraine really make any attempt to stop the free flow of information.  Large numbers already travel within the EU for business and tourism despite the Visa hassles.

Why though do these nations want to encourage absolute freedom of travel when it will allow a direct comparison of models in a physical rather than theoretical environment for their citizens in far, far greater numbers?

The USSR indeed stopped such travel to prevent this happening in attempts to avoid any such comparison and enforce the legitimacy of the system that was in place.

Is it not self-defeating to encourage their citizens to see a viable alternative to what they have at home?

These thoughts came to me whilst completing yet another on-line Visa application for a Ukrainian citizen yesterday.  (Maybe I should consider making a business out of it I complete so many.)

After a little contemplation, I decided that conventional wisdom of those within the EU championing Visa-free for the FSU nations, were following a similar thought process as that I outline above.  The more exposure to  the European environment, the more society (rather than ineffectual NGOs) will demand changes.

As I have said before, the current Ukrainian government has not bowed to NGOs in any obvious way but have bowed to public bottom-up A-political protests over issues like the proposed new Tax Code which brought more than 10,000 camping outside the RADA.

So why is it that both ruling Russian and Ukrainian politicians who have an interest in retaining the power vertical, are so keen to have their entire societies free to physically experience (rather than read about) alternative models?

A possible answer came to be via the Visa application I was completing.  Those most likely to experience an alternative structure and recognise its benefits are the students, business people and “middle class”.  They are also those most likely to be capable of organising, publicising  and participating any bottom-up A-political large scale protests for changes in the structure.

These people though are far more likely to be offered work or afford residences outside Russia and Ukraine within Europe and return to their home nations to visit family and friends sporadically.  Thus allowing the free movement of a largely well educated youth to seek further education and employment within Europe, or having the “middle class” have alternative homes outside of Russia and Ukraine where they will spend their time as much as possible, removes a large section of society best placed to challenge the current power vertical in either nation for protracted periods of time.

The pitiful and wholly ineffectual lamenting by the relevant  diaspora have made no difference to the power vertical in either nation.  A larger diaspora is unlikely to make any difference to the current power vertical in either nation as we are dealing with short term, grab what you can politicians when all is said and done.  The long term (25 years from now) is not their concern when it comes to expanding their power or assets in the immediate term.

It therefore pays the current power vertical in either nation to encourage those most likely to challenge it effectively and from the bottom-up, to have them studying, working and living outside the national borders under the guise of championing their rights to travel.

It is incredibly easy to employ the psychological “self” and “other” when it comes to foreign sponsored or completely foreign NGOs.  The current saga of NTV and Golos in Russia is an example.

(My good lady help set up NTV in 1993 and according to her there is a “history” between NTV and Golos dating back to 1995 – That’s another story though.)

Neither opposition in Russia or Ukraine have any real policies to sell to the populous.  Not many sit in the same place on the left to right political spectrum and are therefore unlikely to present a united front against the current majority leaderships.

Ms Tymoshenko’s calls for opposition unity are a waste of time as the Ukrainian opposition parties range from the far right to firmly in the left.  There can be no political unity when there is no shared ideology other than being in opposition to the current ruling majority.  The enemy or my enemy is my friend, does not make for a good government should you win, as Ukrainians discovered with the Yushenko/Tymoshenko debacle.

In effect the opposition is so fractured ideologically, they are ineffectual.  There is also the issue of whether the opposition would be any better.  Nobody really believes Ms Tymoshenko is the champion of democracy she claims to be.  Would her power vertical be any different to the current one in Ukraine?

So in summary, whilst actively seeking to obtain free travel in Europe for Russian and Ukrainian citizens may seem somewhat self-defeating for the current power vertical by exposing it for what it is and allowing the experience of alternatives, also allowing the most effective and dangerous sections of society, (the business/middle class and highly educated students) to spend many years outside the national borders as quasi-diaspora in actual fact may prolong the current arrangements for those in power.

Whereas the USSR policy was to keep external influences out to preserve the system, is the current policy to allow internal influences out to achieve the same ends?

What do you think?  Is it time for me to try an alternative medication or is there some twisted logic in what I have written?

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Free land in Odessa…..if the force is with you

November 21, 2011

Well here is a story I have been meaning to comment upon for the past few days, and indeed I have in other parts of cyberspace, but due to pipelines and electoral law changes, it has been kicked down the list of things to comment about until today.

Our dear Mayor, presiding over the most openly scandal prone and nefarious administration in Odessa since I have lived here, used a little known law to grant people known to the administration 1000 square meters of land for free.  This land happens to be in the Otrada area of Odessa which is extremely nice.  In fact Otrada is my favourite beach in Odessa.

Unfortunately and as is happening all to frequently for an administration so poor at hiding its nefarious acts, (unlike the previous one which at least had the good sense to hide what it was doing very well,) the use of this little known law made it to the media.

Yes there is indeed a law that grants every Ukrainian citizen 1000 square meters of land for free if they apply for it.  Of course you need to know which law it is to apply.  Well for all my Ukrainian readers, Statute 40 of law 2949 is what you are looking for.

Anyway, this gaining of free land in a very much sought after part of Odessa could not be ignored once it hit the press so who else but Lord Vader himself to enter the darkest part of a rival evil emipre,  the Mordor Odessa administration and seek out his own free 1000 square meters of land?

As you can see, by the end of the video of his journey into Mordor Odessa City Hall, his application has been made and the force was indeed with him.  Somehow I doubt he will end up with land in Otrada though.

Anyway, it seems the City Administration is stating the allocation of land at Otrada to its friends was a mistake, although they haven’t yet allocated alternative, less valuable land to their friends.  These poor souls are still stuck with prime land in a prime location.

The good woman has decided that when she has time over the next few weeks, she is also going to try and apply for her free land.  I will let you know if she is successful.  If I don’t let you know, it is quite possible the local press will should she be refused.

Should I fear for my little hobbit as she takes on the full force of Sauron in the heart of Mordor?  I think not, for she too has friends who hold rings of power in Donetsk and Kyiv.

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Mortgages to reappear via Ukrainian State owned banks if you are very lucky‏

July 15, 2011

The banks owned by the Ukrainian State will collectively begin to start loaning for mortgages in an effort to stimulate the housing market from August according to Serhiy Podrezov, CEO of Oschadbank.

The anticipated loan rate will be at 14% which will eventually drop to 12%. Blimey! Still a long way above most of the continent although, to be fair, considerably lower than the 27% interest rates pre-crisis.

It is also interesting to note that the mortgage maturity is between 3 and 5 years unlike the 25 – 30 years on the rest of the continent. In effect it is nothing more than a short term real estate loan.

The fund allocated is a mere UAH 35 million, or about $ 4.5 million, which is of course, nothing. In Odessa that will be enough for two or three top end good houses or penthouses, or about 36 reasonable apartments. In a city like Kyiv it will buy even less.

Farcical to think that this will stimulate anything even if, as usual, the potential home owner has to stump up 50% cash and borrow the rest thereby making the financing of 36 Odessa apartments 72 with the additional elasticity to the funds created.

Why I am making comparisons to Odessa is yet another farce as this money will never get out of Kyiv.

Anyway, if you fancy a punt at becoming one of the very few who will soon devour this tiny pot of money within a few days, then the State owned banks to which you should apply are Oschadbank, Ukreximbank, UkrGasBank and Kyiv Bank.

Feeling stimulated? No? Neither will the housing market!

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