The U.S. housing slump continues, according to the latest numbers, but foreign buyers–in particular wealthy Russians–are taking advantage of the situation and snapping up luxury properties at bargain prices, according to Business Week.International buyers purchased an estimated $82 billion worth of U.S. homes in the 12 months prior to March 31, a 24% increase from the previous year, the National Association of Realtors reported.
And many of the biggest recent purchases were made by Russians.
- Roustam Tariko, the billionaire owner of Russian Standard Bank and Russian Standard Vodka, bought a $25.5 million estate on Star Island in Miami Beach in April.
- Vladislav Doronin, chairman of Moscow-based real estate developer Capital Group, paid $16 million in 2009 for a Star Island home once owned by Shaquille O’Neal.
- Yuri Milner, founder of Moscow-based DST Global, which invests in tech companies like Facebook and Twitter, paid a record-breaking $100 million for a 25,500-square-foot mansion in Silicon Valley.
- Igor Krutoy, Russian composer, bought a $48 million apartment at the Plaza Hotel in March. Krutoy, along with his wife, purchased a $12.85 million Hamptons home several months earlier.
There are two reasons behind the Russians’ real estate buying spree, according to Business Week.
The first is that an American property is now considered a status symbol among Russia’s elite.
According to BW:
“In Russia, it’s a status thing now,” says Jorge Uribe, a real estate agent with One Sotheby’s International Realty in Coral Gables, Fla. “If you’re wealthy and you say you have a place in Miami, it’s like saying back in the old days, ‘I own a place in Ibiza or Monaco.’ It’s a cocktail conversation thing.”
U.S. properties are a smart investment for foreign buyers, given the weakening of the U.S. dollar. The Russian ruble increased 9.4% against the dollar in the 12 months through July.