The latest 10-year Manhattan Market Report, compiled by Jonathan Miller, was just recently published. The report contains tons of data about the Manhattan market. From this data, we decided to calculate two figures that our clients ask about most – the average annual rate of return for Condos and Luxury properties in Manhattan.
Based on our calculations, the cash-on-cash returns for Condos and Luxury properties in Manhattan from 2002 to 2011, including the price declines of the Great Recession, were quite strong. For instance, we calculated an annual return of 5.2% for Condos and 6.1% for Luxury properties (being defined as the top 10% of all sales in the city). For this calculation, we used the increase in price per square foot, perhaps the best measure.
Had we calculated these returns based on a 50% down payment, the yields would have been percentages in the low to mid teens. At an even lower down payment, such as 30%,which is offered by HSBC, the returns would have been even higher.
For more information about investment returns for Manhattan properties, please ask us.