Dosvidaniya, New York! Rich Russians Stop Buying Condos

Wednesday, May 14, 2014

The 13-story tower at 525 Clinton Avenue is nearly finished. The developer, Karnusa Equities, is selling the condos for $650,000 to $3 million. The 13-story tower at 525 Clinton Avenue is nearly finished. The developer, Karnusa Equities, is selling the condos for $650,000 to $3 million. ((Matthew Schuerman/WNYC))

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.



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Comments [5]

Mike from Brooklyn

Our housing crisis would improve markedly if a law was passed banning anyone but US Citizens from owning real estate in NYC. And how about banning anyone who doesn't at least half a student or work visa from signing a lease?

May. 14 2014 07:25 PM

Are we supposed to really care about rich real estate brokers and rich Russian plutocrats? Give me a break! This market affects no one that isn't selling or buying $20 million houses. What a stupid article. What a stupid reporter. Who's butt is WNYC kissing here...big real estate? Sliding into the slime.

May. 14 2014 04:26 PM
Pox from NYC

I couldn't believe the address she was talking about was in Brooklyn, wow Brooklyn is going down the "sewer" tubes if these are projects that are going up. Bloomberg must be feeling very proud of his damage to ordinary folks trying to get by without $5 million condos in their pocket.

May. 14 2014 10:38 AM

We should be worried. Very worried.
For if we offend Czar Putin, after he finishes gobbling up the rest of eastern Ukraine, Vladimir might get on his pony (bare chested of course) and do a quick "ukraine" --by visiting Brighton Beach Brooklyn....and "liberating" some of his Russian speaking brethren.

May. 14 2014 09:21 AM

Or it could be a sign that every last Russian with an extra $18 million USD -- however gotten -- is here now, behind double locked doors.

May. 14 2014 09:14 AM

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