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Investment in New York City Real Estate
July 12th, 2017 | Posted in Real Estate News
New York City real estate, for many years now, has been viewed by foreign investors as a safe and secure place to park money. In a survey polling international investor confidence by the Association of Foreign Investors in Real Estate, NYC continues its reign as the highest ranked US city for the seventh year in a row. And among this wave of confidence, China is a heavy hitter. In 2016 alone, Chinese buyers invested $14.3 billion in New York real estate. With purchasing power like that, any Chinese policies shifting capital flow has a direct effect on the market in the Big Apple – and that is exactly what has happened the past few months.
A series of capital controls issued by Chinese regulators aimed at promoting investment within China is causing a low rumble in NYC: “As of Jan. 1, citizens are required to pledge to banks they will not use funds to buy property overseas […] The $50,000 [limit] that each individual is permitted to convert every year can now only be used for travel or medical services.” Some studies project Chinese real estate investment overseas dropping by 20%. Essentially, money that would pour into the residential and commercial market here is being stemmed – developers and sellers are feeling the pinch.
That is just one aspect of a market that is showing more and more signs of softening. Even though our economy continues to grow, we are witnessing a fair amount of uncertainty sidelining both domestic and foreign buyers. The rate of purchasing has slowed—days on market for all of Manhattan averaged 110 days in the second quarter of 2017, up 19% from last year. As a result, for the first time in several years, new developments are increasingly willing to grant concessions. From covering various transaction taxes, complimentary amenities, and significant price drops, buyers can seek out advantages in the market right now. For buyers looking for a good value, this is a great time to enter the market. Home prices may continue to drop, but once it hits bottom the market recovers swiftly. We have seen this cycle in NYC before and now is a good time to capitalize.
Property of the Month: 677 West End Avenue, 14AB
- Beautiful bright, sunny and airy
- Includes windowed bonus room
- 3 bedroom, 2 bathroom
- Type: Co-op