After independence, real estate prices have jumped in Abkhazia.Homes outside Sukhumi are selling for around 3.5 million rubles.

There probably wasn't anyone happier than my friend Volodya when Moscow recognized Abkhazia's independence. Several homes he had purchased outside Gagra immediately doubled in price. Within weeks, thousands of Russians began flocking to Abkhazia to purchase beachside homes, confident that their government would safeguard their investments. The demand has led to a new advertising trend in Moscow — real estate agencies offering cheap, quality buys in Abkhazia.

Four years ago, Volodya bought four homes in Abkhazia for $22,000. He saved the money while working for a mobile phone company. But Volodya now has a small fortune. Real estate prices have steadily grown ever since — especially announcements were made that the 2014 Olympic Games will be held in Sochi.

Today, Volodya says his real estate is worth a whopping $350,000. What other investments can bring 1,500-percent growth in just over four years? But Volodya isn't rushing to sell his property. He rents the homes out to vacationers for 1,000 rubles per day during the summer season and earns around 500-700,000 rubles.

Estimates put the number of Russian homeowners in Abkhazia at 50,000, and their number has increased since Russia recognized the nation's independence. But although newspapers are full of property advertisements, becoming a homeowner in Abkhazia isn't easy. Abkhaz law prohibit foreigners, including Russians, from buying property, but Russian and Abkhaz real estate agencies have developed several ways to get around the legislation.

"This is how we usually do things," I was told at a real estate agency that handles property transactions in Abkhazia. "We give a power of attorney to an Abkhaz local, and the home in effect becomes his property. To avoid theft, the two sign a loan agreement. Our second option is finding an Abkhaz local to open a joint enterprise. We charge around 25,000 rubles for this service."

"What will the enterprise do?" I asked.

"Nothing!" they said.

The authorities turn a blind eye to such transactions, hoping to promote foreign investment in the country. But new legislation is expected to be passed shortly that will allow Russians to buy homes in Abkhazia for a small property tax.

"Who knows?" I thought. "What if I find some cheap beachside property for myself?”

I logged onto the Internet to see what kinds of offers I could find. For $55,000, I found a two-story home outside Sukhumi -- right on the Black Sea -- with 30 acres of land, a vineyard and apricot trees. This is the typical “trophy” property that sells for around 600,000 rubles, up from 400,000 rubles in mid-August. I decided to call the real agency to learn more about the property.

The Abkhaz residential market is unique as in addition to new and used properties, there are also "trophy" homes that were left behind by Georgians during the Abkhaz War in 1992. These properties account for nearly half of the homes for sale on the market. Buying these properties is far cheaper than ordinary Abkhaz homes, but whether the prior owners will eventually demand their land back is a question that looms large. It should be mentioned, though, that this seems unlikely now that Russia has recognized Abkhazia’s independence. The properties are officially being termed “abandoned.”

"Didn’t you see the date on the advertisement?" the real estate agent asked me. I hadn't noticed it was placed sometime in mid-March.

"Is the home already sold?" I asked.

"No," he said, "but the price has changed slightly. Now it’s selling for $120,000 together with Abkhaz citizenship. You'll have dual citizenship, just like all Abkhaz, and the property will be registered in your name."

"Homes in Abkhazia! From $30,000!"

I had received the spam by chance. A Moscow real estate agency was promising to arrange all the documents necessary for buying land in Abkhazia, and for the bargain price of $30,000.

"Now that’s a different story!" I said.

But it turned out using the agency was much more expensive than it initially seemed.

"We have a house for around that price in Pitsunda, which is selling for around 700,000 rubles," the agency told me. "But it's a trophy property. We'll do the paperwork right here in Moscow. I'll bring a photograph by your place. Just let me know when and where I should come by."

Wait a second! I certainly didn't plan on buying a photograph for 700,000 rubles. How could this even be possible? Buying and registering a home outside Russia without leaving Moscow?! Do the Abkhaz authorities know Russian real estate agencies are selling off chunks of Pitsunda?

"That can't be!" Pitsunda Mayor Beslan Ardzinba told me, who I met several days later. "All real estate transactions are made with our sole permission. Your agent sounds like a thief. Come on by to see us. We'll make a deal."

"But what if the Georgians come back?" I asked. I remembered how Saakashvili had threatened to block the attempts of Russian investors to purchase property in Abkhazia.

Ardzinba only laughed in answer.

After calling tens of real estate agencies in Moscow and Abkhazia, I realized that my dreams of acquiring a beachfront property for $30-$40,000 were unrealistic. Ordinary homes in Abkhazia are now selling for at least $150,000 -- a price tag too high for most middle-class Russians.

This is why, agents say, most new homeowners are “respectable Russians” -- government officials, businessmen and generals. Highly ranked military personnel pay the biggest price for land -- around 300,000 euro for fully outfitted two-story homed.

Georgia is against Abkhazia’s real estate boom!

"Tbilisi is compiling a report on the property left behind by Georgian citizens in Abkhazia, and identifying their new owners. The report will be finished in 2008. Afterwards, Georgia will file a lawsuit against Russia in Strasburg court. We’re talking about $20 billion -- a quarter of which is compensation for refugees who lost their homes.”

Компания "SV Development"