Russian investors have always been big spenders in America’s luxury real estate sector. But with the U.S. government slapping the country with heavy sanctions in the wake of its invasion of Ukraine, it looks like the party is over for Russian buyers, housing market experts say.
One of the biggest hubs for Russian real estate buyers in the U.S. is Sunny Isles in Florida (pictured), often known as “Little Moscow” or “Moscow by the Sea”. It’s a hotbed for Russian investors who’re interested in buying luxury homes by the sea, and the area is home – at least some of the time - to hundreds of wealthy Russians.
However, the rollout of new sanctions directed at Russia’s economy means that many individuals in the country, especially those with government connections, will struggle to safeguard their money through family connections or by investing in real estate, the Miami Herald reported.
Real estate market experts told the Herald that the sanctions will make it difficult for Russians to move money out of their home country to invest in the U.S.
Some Russian buyers may already feel as if they are blacklisted from U.S. markets. Brokers in the Miami-Dade area told the Miami Herald that they have seen less activity from Russian buyers over the past few years. Jon Mann, a real estate pro with The Jills Zeder Group at Coldwell Banker Realty, said that is because of fluctuations in the ruble and crackdowns on foreign investments using shell companies.
“I think it’s kind of a wait-and-see approach to see how things play out,” Mann told the Miami Herald. “I don’t think there’s going to be a wave of buyers coming here with additional scrutiny from the Biden administration with the sanctions they’ve put in place—I don’t think they’re going to want a microscope on their large cash transactions here.”
That said, other experts believe the sanctions will have less impact than many suspect, because the majority of Russians who typically invest in U.S. homes are not the elite who’re being targeted.
“I don’t think that this will have any real impact,” said Anders Åslund, a Swedish economist and author of Russia’s Crony Capitalism: The Path from Market Economy to Kleptocracy, in an interview with the Miami Herald. “The people in Miami are not really the top people. These are comfortable people rather than the top people.”