Dosvidaniya, New York! Rich Russians Stop Buying Condos

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As the crisis in Ukraine grinds on, President Barack Obama has issued travel bans and frozen the U.S. assets of dozens of Russian individuals and corporations. What those sanctions are accomplishing is now a matter of debate, but in New York City, the real estate industry is feeling the chill.

Deals are on hold; clients are scared off.

Victoria Shtainer, a broker with Douglas Elliman, recalls one Russian buyer who was prepared to spend $5 million on a condominium. When the Ukrainian crisis began, he backed out with just a short message to her.

“I understood when he said, 'I can’t do this right now.' I mean that’s all they need to say. I understand,” Shtainer said.

There are no reliable stats on foreign buyers in New York. But a recent survey of brokers by Reuters found that since the Ukrainian crisis, wealthy Chinese have overtaken the Russians as the biggest purchasers of apartments in Manhattan.

And there are other signs the sanctions are having an effect. “Well I think that various people that were maybe friends with Mr. Putin are not so much friends with him anymore. I think that some of them are saying that he went too far,” said Jacky Teplitzky, who teaches at New York University and sells homes for Douglas Elliman.

For Shtainer, this feels like a fight among family. She was born in western Ukraine when it was still part of the Soviet Union. The violence she’s seen on TV upsets her.

Does the worsening state of Russian-American relations make for awkward conversations with clients?

Victoria Shtainer

Shtainer cracked an ironic smile before answering. 

“You know, when I lived in the Ukraine it was Russia. In 1978 it was one country, so Russia feels that they still own Ukraine, they still own Crimea, they still own Kazakhstan. I guess they wanted to take what’s theirs — in their mind” she said.

Money, power, national pride. The Ukrainian conflict is about all of these things. But it’s also about real estate.