It’s been easy to shrug off the U.S. sanctions against Russia as something that only impacts people half a world away. That could be changing. Anecdotal evidence suggests that wealthy Russians, who have become a big part of the luxury real estate market in places like New York and Miami, may be sitting on the sidelines while our two countries duke it out on the diplomatic stage.
Julie Satow, a contributor to The New York Times, took a closer look at the issue and told The Daily Ticker about a member of Russia’s parliament who “was looking for a $25 million-$52 million purchase and he sent [his realtor] an email after the invasion saying ‘I’m sorry. I’m pulling out.’”
The unidentified rich Russian isn’t the only one. Satow notes that anti-American propaganda runs rampant in Moscow and it may not be the best time for Russian citizens to flaunt the fact that they are making a big splash in the New York real estate market.
Gone are the days, perhaps, of record breaking buys like billionaire Dmitriy Rybolovlev’s $88 million condo purchase in 2011 (he purportedly bought it for his 22 year-old daughter). While that was the highest-priced example, Russians and other wealthy international clients have long used U.S. real estate as a shelter for their cash. Satow says 40% of the New York real estate market is made up of foreigners and 50% of new construction is snapped up by clients overseas.
So will frosty relations between Moscow and Washington send Russian money elsewhere for good? Probably not. While there may be a “momentary freeze” of such big purchases, Satow suggests the safety of the American market may soon bring in “more buyers…but they may not want to do the super high profile penthouses.” Instead, she says, they might opt for more “conservative” $2 million apartments that won’t make the papers here and back home.