Tag: China

Manhattan Market: What Does a $2.5M Condo Really Cost Foreign Buyers Today?

Manhattan Market: What Does a $2.5M Condo Really Cost Foreign Buyers Today? Rise in local currency cost to a foreign buyer for $2.5M NY property, from 2014 to 2016 based solely on currency value fluctuation

Much has been written about Chinese and Russians dropping $30+ million on Manhattan luxury condominiums since 2012. As a result, even sellers of condos priced between $1-4 million ask: “Where are the foreign buyers for my home? What will you do to attract them?”

While huge amounts of foreign currency is being spent on US real estate, not every property type is benefiting from it or is appealing to an international buyer. Generally, foreign buyers who Read more…

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Chinese Buyers Purchase $28.6 Billion in US Property, Find Safe Haven in New York Real Estate

Chinese Buyers Purchase $28.6 Billion in US Property, Find Safe Haven in New York Real Estate

This summer, a luxury family home in Scarsdale, NY sold for $1.75 million. On the surface, such a sale is hardly remarkable. In fact, perhaps the most unremarkable part of the sale is that the buyer’s Chinese nationality drew little attention. Even a year or two ago, the sale of a non-Manhattan luxury home to a foreign investor would have been unusual. Today, it’s increasingly commonplace. The Shanghai-based investor who purchased the Scarsdale home (and immediately rented it out to a local family) is one of hundreds of Chinese investors who are increasingly investing in real estate not just in Manhattan, but also in New York’s boroughs and suburbs.

In the last year, Chinese buyers have replaced Russian buyers as the primary real estate buyers in New York– and this trend is expected to continue throughout 2015. Given current international market fluctuations and Russia’s continued economic struggles, this news may come as little surprise to many of you.

Since last year, Ukrainian turmoil, economic sanctions against Russia and a progressively worsening economy have slowed down Russian purchases in New York real estate, said Marlen Kruzhkov, an attorney with Gusrae Kaplan Nusbaum who advises many investors from former Soviet Union countries.

Chinese buyers, on the other hand, are eagerly pulling savings from their home country and investing overseas, and New York real estate has been a prime target for these investments. The recent stock market crash, including the late August drop of 8.46% in a single day for the Chinese exchange – capping off a 32% drop between June and July, according to Bloomberg data – has only enhanced the trend.

In the year ending in March 2015, for the first time, Chinese buyers exceeded all other buyers in terms of unit purchases and dollar volume, purchasing $28.6 billion worth of U.S. property, according to National Association of Realtors. In particular, they have been finding their safe heaven in New York real estate.

“New York is an international market. They feel that the market is very transparent, very conservative and they feel very comfortable in coming to the U.S. and to buy real estate in New York,” said Emily Zhu, director of marketing for Advantage America EB-5 Group, who works with many Chinese developers and investors in the U.S.

As the Scarsdale purchase reflects, Manhattan is no longer the only target for foreign investors, who have been seeking better prices and yields in the other boroughs. “A lot of Chinese buyers are starting to accept places others than Manhattan,” Ms. Zhu said.

For instance, Chinese developer New Empire Real Estate (NERE) is currently building on Park Slope’s Fourth Avenue and “there are a float of Chinese buyers that buy even before the development is constructed; there are a lot of pre-sales,” said Ms. Zhu, who represents the developer.

After the stock market turmoil, “some Chinese investors will want even more to diversify their assets in order to own something that is tangible rather that intangible,” Ms. Zhu said.

Things have changed for Russian buyers. “The economy is contracting terribly and the situation is getting progressively worse,” said Mr. Kruzhkov. As a result, he added, “The nature of purchasers has changed. There are less people buying.”

In particular, small and medium-sized Russian investors seem to have disappeared altogether from the New York City real estate market.

Only the wealthiest are still around, but they have changed their targets.

“In the last 6 months, they have been investing in different things, they are not necessarily buying apartments. They are investing more in development projects or pre-existing income producing buildings, more commercial or mixed-use,” properties said Mr. Kruzhkov.

For example, one of his Russian clients recently sold a Manhattan apartment for almost $25 million. He immediately re-invested in a development project.

A major flow of foreign capital into New York’s development market – especially as Chinese markets continue to cool – is a trend to watch in the coming months.

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Asia “On The Move” – Who’s In & Who’s Out In Stocks & Why?

Goldman Sachs’ Hong Kong-based Strategist, Timothy Moe Talks Stocks & Investment Strategy – Video

I found this video interview between Bloomberg TV’s Rishad Salamat and Timothy Moe on the state of the Asian stock markets extremely informative. With unique insight and perspective, Timothy provides his and Goldman Sachs Group Inc.’s predictions for the 2nd Quarter.  New York luxury real estate is increasingly attractive to international investors providing strong returns and increasing profits so I find as a luxury real estate broker, being aware of what’s happening around the world is key to potentially predicting trends in Manhattan’s own market. (Source: Bloomberg – April 4th)

After a robust market in the 1st quarter, inventory continues to be tight and prices are showing upward pressure. I will provide a more detailed update this week, however, I hope you find this video informative to your understanding of Asia and its stock markets. – Tony Sargent

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CNBC – VIDEO – Penthouse Shortage in NYC? Luxury Real Estate Inventory Down in Manhattan

The luxury real estate story in Manhattan for over a year has been about declining inventory and sharply rising property prices. I have had multiple bids on most of my listings in 2013. At the top of the luxury market competition for the best lines and views continued to rise over the Spring and into the early summer. This CNBC video shares a bit more of the story.

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Will the Dow and World Markets Affect Manhattan Real Estate?

Will the Dow and World Markets Affect Manhattan Real Estate? Photo Source: Courtesy NYT.com Photo By Spencer Platt/Getty Images

Will the changes in Wall Street, the Dow Jones Industrials and S&P’s recent downgrade of US Debt to AA create a negative impact on the Manhattan real estate market?

The strongest evidence for how the market will fare today will be to look back to the market crash of 2008. After the collapse of Bear Stearns, there was a three to four week pause in market activity, especially from the Wall Street segment of property buyers. After that initial gap, buyer activity resumed for a month before the market’s typical summer lull, but after Lehman collapsed, there was once again a period of very little activity. Real estate sales started from the entry level of the market and only gradually moved to the luxury segment. As the economy began to stabilize and buyers became more accustomed to their new reality, the Manhattan real estate market bounced back – fueled by the 2010 rise of the Dow and the global equity markets.

But what will happen as a result of our current market instability? Read more…

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Monday Market Video: Average Manhattan Home Now Costs $2M

Posted on April 4, 2016

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