Russians Prop Up the Luxury Housing Market

Roustam Tariko, billionaire owner of Russian Standard Bank and Russian Standard Vodka, bought a $25.5 million estate on Star Island in Miami Beach in April—the priciest purchase in the city since 2006. Tariko’s neighbor? Vladislav Doronin, chairman of Moscow-based real estate developer Capital Group, who paid $16 million in 2009 for the Star Island home previously owned by Shaquille O’Neal. “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.”

Russians and other overseas shoppers are buying some of the priciest homes in America as the broader housing market slumps and a weak dollar makes U.S. property more of a bargain, according to real estate brokers who handle luxury properties. International buyers purchased an estimated $82 billion worth of U.S. homes in the 12 months ended on Mar. 31, a 24 percent increase from the previous 12 months, the National Association of Realtors reported in May. Jed Smith, managing director of quantitative research for the association, says the number of overseas buyers for multimillion-dollar homes is increasing, helped by the rise of emerging markets such as Russia, Brazil, China, and India.