The New York luxury real estate market is dominated by Russian millionaires

New York - The new favorite clients of New York real estate agents selling luxury properties are Russian billionaires. They have plenty of money and are not afraid to spend it. According to The New York Times, $84 billion (about 1.6 trillion CZK) flowed out of Russia last year, of which up to five percent likely ended up in the U.S. real estate market. Wealthy Russians are reportedly concerned about Vladimir Putin's return to the presidency. The politician warned before his election that Russia must end the period of "unfair" privatizations from the 1990s.
Many wealthy Russians are relocating their families to New York. Sometimes they use special visas that guarantee green cards for permanent residency in the United States for people who invest in the country. "I think Putin scares them to death," said New York real estate agent Victoria Schtainer, who was born in Russia. "If everything were fine, so many people wouldn't be buying here so quickly and at such prices," she added.
More than 200 New York real estate agents recently even attended a special training dedicated to selling properties to wealthy Russians. A panel of bankers and lawyers went through some of the largest real estate transactions for these clients, including the record sale of a luxury apartment overlooking Central Park to Russian billionaire Dmitry Rybolovlev. The wealthy man bought the apartment for his daughter for a staggering $88 million (1.6 billion CZK).
Russian billionaires mostly made their fortunes from the privatization of industry in Russia and from high prices for oil and other commodities. Rybolovlev, for example, earned his nine billion dollars thanks to the privatization of the fertilizer producer Uralkali. "Everyone knows that the ones with the big money now are them. When I heard about the sale of the apartment by Central Park for $88 million, I immediately knew it had to be a Russian," noted New York real estate agent Jill Sloane.
Another major purchase in the city was made by composer Igor Krutoy, who bought a luxury suite in the famous Plaza Hotel for $48 million (888 million CZK). His compatriot and former deputy Russian finance minister Andrei Vavilov then paid $37 million (685 million CZK) for a luxury apartment on the upper floor of the Time Warner Center with a view of Central Park.
Moreover, Russians often spend tens of millions of dollars on modifications to their new properties after purchasing luxury homes and apartments. They hire expensive interior designers, such as Jacques Grange, for this purpose. According to agent Jacky Teplitzky, they usually know exactly what they want. And they often end up paying twice as much as they originally planned.
Wealthy Russians also try to make an impression on the New York nightlife scene. They reportedly enjoy dining at the luxury Japanese restaurant Nobu and sipping drinks at the trendy Standard Hotel in southwest Manhattan. According to Teplitzky, they are often thirty-somethings or forty-somethings obsessed with sports, accompanied by several women at once. "When I'm with them, I feel like I'm in a movie. It's a completely different world," the agent noted.
Russians, as well as wealthy individuals from India, Brazil, and China, are the main reason luxury property prices in the U.S. are rising, although the rest of the market is still struggling. Russians, in particular, are spending the most. According to estimates, in the last five years, they have spent one billion dollars on American properties. The number of billionaires in Russia and Ukraine has tripled since 2009 to 104, according to Forbes magazine.