New York state of mind: real estate opportunities in the Big Apple

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With relatively reasonable property prices and a tradition of welcoming foreigners, New York continues to be a favoured investment destination

New York state of mind
New York’s Statue of Liberty symbolically welcomed settlers in the past; today, it welcomes global investors

By Stuart Farquhar

This is the second part of our ultimate guide in global property investment in 2016. Read the previous instalment here.

Although according to the National Association of Realtors, “Asian buyers are strongly focused on the west coast,” no single area in the US attracts more Asian commercial and residential property investment than Manhattan. The USD10.8 billion being spent on real estate there between 2013 and 2015 amounted to more than Los Angeles, San Francisco, Washington DC and Chicago put together, according to Cornell University’s Real Estate Review last June.

Many of these purchases have been in the luxury residential sector. One of the most high profile has been the 118 East 59th Street project, a 29-unit building designed by Singapore’s SCDA Architects, with apartments set to range from USD5 million to USD18 million on the project’s completion in 2017.

According to Louise Phillips Forbes, licensed associate broker at New York real estate agency Halstead Property, the current economic climate makes New York real estate an especially appealing investment for Asian-based investors.

“Many of the more affluent buyers from China will be looking for alternative investment opportunities since there is uncertainty in the stock market and many of them recognise New York real estate as the best place to park money and preserve their wealth,” she says.

More: Tall and skinny towers are dominating the NYC skyline

According to Forbes, in terms of luxury property sales, New York has the upper hand over the likes of London for a variety of reasons – not least price.

“Compared to price per square foot numbers in other major luxury markets, i.e. London (USD4,480) and Hong Kong (USD4,682), Manhattan is a bargain at just USD2,586 and becoming increasingly more appealing to foreign buyers,” she explains. “We saw New York property values jump almost 19 percent in 2014 in the luxury market, the most of any international city, and some experts are predicting that New York will surpass London in the next decade, making it even more attractive to people looking for long-term investments.”

Just as in the past, New York’s Statue of Liberty symbolically welcomed settlers from around the world; America’s hitherto welcoming attitude to foreigners is enshrined in its real estate regulations. This, combined with an aversion to punitively taxing high-value property deals, gives the Big Apple an additional advantage over some other global metropolis, says Forbes.

“New York has much lower closing costs and doesn’t have additional fees associated with a purchase simply because someone is foreign,” she explains. “We have the modest mansion tax, which is just 1 per cent of the purchase price for anything over USD1 million, and the mayor is considering raising it to anything above USD1.75 million.”

More: Is this New York’s first ever ‘courtscraper’?

Compared to “stamp duty” taxes of up to 16 percent in Singapore, 12 percent in London and 7 percent in Sydney, it’s easy to see why some foreign investors might prefer New York.

Aside from financial security, Forbes also highlights a more literal form of security as a potential reason for foreign investors to be attracted to New York rather than other high-profile markets.

“Recent terrorist attacks and on-going threats in European cities may cause Asian buyers to look more at New York,” she says.  “Many foreign buyers consider New York to be safer compared to other international cities, recognising America’s superior efforts in homeland security.”

New York real estate picks

432 Park Avenue photo by Anthony Quintano
Image credit: Anthony Quintano

432 Park Avenue
Developer: CIM Group/Macklowe Properties
Completed: 2015
Price: USD7-95 million
Size: 94 stories, 104 units
X-factor: The tallest building in New York – if One World Trade Center’s antennae are excluded – and the tallest residential building in the Western Hemisphere, 432 Park Avenue stretches up 1,396 ft into the heart of the Manhattan skyline and is projected to totally sell out for USD3.1 billion. With just 104 apartments across 94 stories, the tower offers a lot of space for a lot of money – the average price per square foot is expected to end up at around USD6,900. The building offers 30,000 sqft of private amenities including gym, spa, outdoor terrace and restaurant.

Via 57West

Via 57West
Developer: Durst Fetner Residential (The Durst Organization)
Completion: 2016
Rental price: TBA
Size: 709 units: studio, one-, two- and three- bedroom rental units
X-factor: With 4,180- sqm of retail space and views of the Hudson River, the 41-storey Via 57West has been described as a hybrid of a traditional Manhattan high-rise development and a traditional European block for its half-glass, half-pyramid look concept by Bjarke Ingels Group. It is being positioned as an affordable New York City apartment highly anticipated by local residents and prospective immigrants.

Check back tomorrow for the continuation of our special report on global investment destinations for 2016 in this four-part series.

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