Moscow’s #1 Real Estate Online Platform Goes Public | CIAN Launches IPO.

CIAN is the online platform that offers nearly every available property in Moscow. If a property is available for sale or for rent in Moscow, there is a nearly 100% chance that it will be listed on CIAN. And now CIAN is offering an initial public offering in both New York and Moscow.

In a previous post, I detailed how to use CIAN to find an apartment in Moscow.

Reuters has done a fantastic job of explaining the nuts and bolts of the IPO. In this post, I would like to explain why I use CIAN with my Moscow real estate agency, and also talk about some of the other players in the Russia online real estate space.

There are certainly some juggernauts in the Russian online space. Avito is hands down, Russia’s largest online trade platform. This is the site you would use to buy and sell anything from used furniture to finding a guy with a truck who can help you move. It also offers real estate listings. According to the Russian business news site RBC, Avito has a market value of $4.9 billion. Avito attempted to buy CIAN recently, but that deal was blocked by the Federal Anti-monopoly service with the argument that they would then control more than 50% of the online real estate space.

The Russian real estate market has been white hot this past year, and CIAN is a central player.

The primary online Russian giant is, of course, Yandex. They aren’t just an online search engine like Google, or just a news aggregator. They have merged with Uber to control the booming taxi market, have their own car-sharing service, and also provide home grocery and restaurant delivery, to name a few. Yandex is a smart and powerful company, so when I heard that they were moving into the real estate space a few years ago, I assumed that this spelled the end for CIAN. I couldn’t have been more wrong. CIAN is continuing to raise the rates for posting properties on their site, and agencies and homeowners alike, are paying up.

Looking for an English-language Real Estate Service in Russia?

The other interesting player is Sber, formerly known as Sberbank, that is now successfully diversifying into areas outside of banking. Sber offers a platform where an owner can offer their property, the buyer can organize financing, and all of the legal matters are taken care of in the bank, thus making redundant much of what a realtor offers. With Sber’s muscles, I am also fascinated that they don’t seem to have much of a dent in CIAN’s business.

Avito, Yandex, and Sber are very much national names, used in nearly every nook and cranny around this vast nation. CIAN is more Moscow specific, which makes sense given the enormous economy of the capital city. In my view as a Moscow realtor, the key advantage CIAN has against its competitors is an easy-to use-platform with a strong accountability feature. If I’m looking at an ad on CIAN, I am almost 100% sure that the ad is real. On other platforms, I don’t have this confidence.

Can Foreigners Legally Own Real Estate In Russia?

It will be interesting to see the future of CIAN with the looming IPO, and with their reported plans for expansion around the nation. For Moscow realtors like me, we continue to see CIAN as THE central player in the online real estate scene in Moscow. And it will be fascinating to see what plays Avito, Yandex and Sber have up their sleeves.

And on a personal note, with all of these massive, smart, and nimble companies essentially removing the need for much of what realtors offer, I have seen many of my competitors close up shop. And I am inspired to provide more value than an online platform, through understanding of the local market, knowing what negotiation levers are available and providing comprehensive due diligence throughout the process.

Can Foreigners Buy Real Estate Property In Russia?

 

And updated version of this post is available here.

The simple answer is “Absolutely!”.  It’s sometimes surprising to me how often I hear the question of whether foreigners can buy real estate in Russia.

But there are also many other questions that arise, such as whether it is possible for foreigners to secure mortgages towards their real estate purchase in Russia.  The quick answer on that is, yes it is also possible.

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Some real estate in Russia will surprise you as it breaks some of the stereotypes you might have, like this modern loft-style apartment in Moscow, in the Paveletskaya neighborhood.

Blogging is my hobby, both with this Planet Russia blog and also with The American blog and YouTube channel, both in Russian.  But one of my main sources of income is the real estate company I founded some years ago, called Expat Flat, which provides real estate service for foreigners in Russia.

I really enjoy both sharing about life in Russia with the blogs, but also making foreigners feel at home in Russia through the real estate service.

I recently made a quick and simple video about foreigners owning real estate in Russia for the Expat Flat Facebook page.  Check it out, and then let’s look at some of the details of buying real estate in Russia.

Now, let’s look through some of the details:

Mortgages

It is possible for foreigners to secure mortgages in Russia.  Generally speaking, you will need to prove a steady official income.  And in most cases, you will need a down payment of 15-20%.  The interest rate can be 10-12% annual.  It is best to find a reputable mortgage broker or real estate agency to help you in this process.  I also recommend only working with major banks, because as a rule of thumb they are less likely to nickel and dime you with the small print.

Commercial Property

If you are looking for real estate investment opportunity in Russia, I would strongly recommend that you consider looking at commercial property options.  The return can be higher than residential real estate.  And you can hire a property manager to take care of all of the details, so that you can live your life comfortably either in Russia or abroad.

Quite often, commercial property that is for sale already has a long-term reliable tenant, so that you can be immediately guaranteed a continuing source of income.

Of course, there are many types of commercial property in Russia.  I highlighted some office space, located directly across the street from the Kremlin, in this video:

Land

As with all the points in this post, there are plenty of exceptions and nuance.  But as a foreigner you can also own land in Russia.  I own a few small plots of residential land.  And I think this can be one of the most intriguing options if you are in Moscow long-term on a budget or in a smaller city around Russia.

In the Moscow region, for example, it is possible to buy a piece of land and build a small, simple house, altogether for under $35,000 USD.  Of course, if you are new to Russia, you will most certainly want a reliable partner to help you through all of the building process and red tape.  Hiring someone reliable will save you money… and nerves!

Residential Property

In most cases, the simplest thing to do is buy an apartment.  The process is simple, but again, it is strongly recommended to hire someone to work with you, and to make sure that all of the documentation is correct and above board, and to help you analyze the best deals on the market, and perhaps offer a few options that you might not have thought of before.

Here’s another video of a flat in Moscow that again shows that there are many unexpected real estate options in Russia.

Taxes

This is where things get interesting.  The property tax is shockingly cheap, but most importantly, Russia changed the law on real estate sale for non-residents at the beginning of this year.  This is important because in the past, there was a heavy tax on the sale if you were not a resident of Russia at the time of the sale.  But now, with the changes in the law, if you have held the property for five years or more, there is ZERO tax in Russia on the sale.  This is important to understand if you are looking at being in Russia long-term and want to avoid paying rent, or if you are looking at investment opportunities.

Hope that information helps!  If you have questions, please don’t hesitate to comment below or to contact me at Expat Flat.  I look forward to continuing to open Russia to you a bit at a time through this blog, and if you are serious about living in Russia long-term, perhaps I can be of some assistance with real estate.