Start spreading the news? They’re leaving today.
It could be the end of an era in New York City.
According to The New York Times, the luxury real estate market in the city may have entered a period of austerity, with the supply of ultra-exclusive, high-rise units outstripping demand.
In a report by real estate firm Olshan Realty, the number of contracts signed for Manhattan apartments that cost at least USD10 million plummeted 18 percent to 107 units in the first half of 2016. The figure in the same period last year was 130.
Olshan also recorded a 15 percent drop in the number of contracts for units with a minimum price of USD4 million in the quarter ending 26 June, CBS reported.
“There are problems in the luxury market,” Olshan Realty founder Donna Olshan told CBS. “Prices got too high and there is just too much inventory.”
Apparently, New York City is one of several markets, including Singapore and Dubai, suffering from plunging prime property values since 2014, according to Savills, as told to The New York Times. Among other pivotal trends, an aggressive clampdown on capital outflows in China as well as dwindling oil wealth in the Middle East have stymied deployment of foreign investments, dousing interest in assets atop the iconic Manhattan skyline.
The US government has also become more wary of all-cash deals from foreign investors with dubious backgrounds who take the guise of shell companies. One such secret buyer, The New York Times reported, was an entrepreneur with links to the Malaysian prime minister.
With fewer leads today, owners have gone so far as to resell at a loss. One57, the Midtown skyscraper hailed as “The Billionaire Building,” has a three-bedroom unit acquired for USD31.67 million in 2014 that now lists for USD27.95 million.
In March, the building’s sellout value stood at USD2.56 billion or USD162 million less than 2013 estimates.