What’s Going to Happen to Miami Real Estate? | by Armchair Banker | Mar, 2022

Ok Miami real estate will be fine. If anything, thanks to people fleeing high taxes and regulations to business-friendly states like Texas and Florida, cities in South Florida have become boomtowns.

But Miami is going to miss a major group of luxury real estate buyers: Rich Russians. Miami has been dubbed the “Russian Riviera” due to the influx of Russian Oligarch money flowing into luxury Miami real estate. Some of the biggest home purchases in the US have been Russian Billionaires purchasing trophy American real estate. Some of these biggest Russian luxury homeowners in Miami include:

• Vladislav Doronin: Known as the Donald Trump of Russia, this real estate billionaire owns Shaq’s former mansion in Miami’s Star Island bought for $16 million. Doronin also owns and operates resorts and has started building luxury apartments in New York and Miami.
• Raustam Tariko: Owner of Russian Standard Bank and Standard Vodka who completed the most expensive home purchase in Miami Beach, which is an estate worth $25.5 million on Star Island.
• Dmitry Rybolovlev: The fertilizer billionaire bought Former President Donald Trump’s Palm Beach Mansion in 2008 (wayyyy… before the Donald thought about running for President in 2016). He also purchased, at the time, the most expensive Manhattan penthouse for $88 million at 15 West Central Park for his daughter to go to university.

It is not just Miami. Many trophy New York properties have been purchased by Russian billionaires. Chelsea Football Club owner Roman Abromovich (or soon to be former owner as the Russian billionaire plans to sell off the football club and use the proceeds to aid Ukraine) owns a couple of townhomes in Manhattan and a mansion in Aspen, Colorado. Russian Billionaires have been snapping up luxury real estate nationwide from Miami, Manhattan, Aspen, to Beverly Hills. Russian high net worth individuals at one point were the largest buyers of Manhattan real estate before the Crimean takeover in 2014. For many reasons, ranging from getting money out of Russia, diversifying their investments, or in Rybolovlev’s case to send her daughter to university in America, rich Russians have been snapping up trophy luxury properties.

But Miami will be fine. Thanks to people living in New York, California and other high tax blue states fleeing to find freedom and Mayor Suarez of Miami embracing Bitcoin, Miami will not only be fine but thrive. Similar to how the industrial age made Detroit, the technology revolution made the San Francisco Bay Area, crypto and Bitcoin is going to make Miami the global city of the 21st Century. Per Bloomberg cities in South Florida has seen the largest population influx. According to Acorns Jacksonville, West Palm Beach, Miami, and Fort Lauderdale saw rent increases of more than 30% during the past year. Also, as Latin America continues to face many economic problems and political turmoil, its richest citizens will continue to make Miami their second home.

As you can see South Florida is booming. Over the years thanks to easy money, the rich getting richer, and foreign buyers, luxury real estate in the U.S. has been booming. But as the US Department of Justice plans to seize yachts, homes, and private jets owned by Putin connected Russian Oligarchs, expect Russian investment in any part of the US economy to go down to zero. No more rich Russians shopping on the streets of 5th Avenue or strolling on Ocean Drive. Many big real estate brokers in Manhattan and South Beach are going to lose a lot of clients in the east. As South Florida booms one of its largest home buyer demographics will not come back.

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