We’ve heard over and over again that wealthy buyers from abroad are keeping the high-end real estate market afloat in the U.S. But it’s the Russian billionaires who are by far the biggest spenders, according to the New York Times‘ Alexei Barrionuevo.
In fact, experts estimate that Russians and other citizens of the former Soviet Union have signed contracts to buy more than $1 billion worth of residential real estate in the past four years alone, he writes.
Of course, there’s a good reason why Russian oligarchs want to put the cash they made when Russia’s state industries were privatized into tangible investments outside their homeland—Vladimir Putin.
Mr. Putin signaled his frustration in February, when he said Russia “must end this period,” referring to what he called the “unfair” privatizations in the 1990s.
Even before Mr. Putin was elected last month to another term as president, many wealthy Russians had been taking steps to move their families to New York, in some cases by using EB-5 visas in exchange for making government-approved investments, [attorney Edward] Mermelstein said.
“I think that Putin scares them to death,” said Victoria Shtainer, a Russian-born broker with Prudential Douglas Elliman in Manhattan. “You can’t have so many droves of people here purchasing at such high rates of speed if things were O.K.”
Aside from political motivation, luxury real estate in the U.S. is a smart financial move for foreigners right now, given the weakening of the U.S. dollar. And among wealthy Russians, a U.S. property is considered a status symbol.
While a slew of Russians have bought glassy penthouses, classic apartments and Miami spreads in the past few years, no one has dominated the news more than Dmitry Rybolovlev, who make a fortune in the potash business and is now worth an estimated $9 billion.
Several years ago he paid what was then a record-breaking $95 million for Donald Trump’s six-acre estate in Palm Beach, and more recently he made waves in New York when he picked up the penthouse owned by ex-Citigroup chairman Sandy Weill for $88 million.
Both properties are now at the centre of lawsuits related to Rybolovlev’s ongoing divorce proceedings in Switzerland.
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