Let’s take a look at the current real estate climates in other parts of the world, like Beijing, Vancouver, Hong Kong, Colombia, Singapore and Israel and see how opportunities in these locales measure up to buying luxury real estate in New York. While there may be other red-hot markets out there, Manhattan stands out as one of the best value for high-end property.
Currently, China is ranked as the #1 hottest real estate market in the world. Boasting a 110 percent growth in the last five years, cities like Beijing and Shanghai are selling luxury real estate at as much as $1,800 per square foot in the downtown core. However, there is evidence that this bubble is about to or already has burst, and a major crash could await the real estate market in the world’s second largest economy. Experts warn of a potential price decrease in the mainland of ten to twenty percent in the next year.
In Hong Kong, real estate sells for $4,400 per square foot, and it has seen triple digit growth in the last five years. That growth rate alone makes one question whether these increases are sustainable, especially in the face of a slower growth China. Hong Kong also has some of the most expensive office space in the world as well. The Pearl of the Orient is popular with Chinese investors, who see the excellent economic potential of the city. This buying frenzy, however, has slowed in recent months as the government has levied foreign investment with a ten percent larger down payment.
Other hot markets include Israel, with a 54.5 percent increase over the last five years, Singapore, with a 50.5 percent increase in the same time, as well as the once dangerous destination – Colombia.
However, Israel has had a marked resistance to foreign investment, with protests and tent cities appearing in the capital. Singapore was recently ranked as the third most expensive city in the world, and public discontent has put a stamp tax of ten percent on foreign investment, effectively curbing the spike in prices and slowing activity.
Meanwhile, in Vancouver, housing prices have doubled in the last ten years. There is an Asian influx of foreign investment creating a new luxury real estate market with several homes selling in the 8-12 million dollar range. However, with new mortgage laws introduced in Canada this week, June sales dropped to a ten-year low at a time of record low interest rates, indicating that the downswing is back in effect in Canada.
Compare this to the price of luxury real estate in Manhattan. Since the crash of the economy in 2008, New York property has never been better value. During the Great Recession, the Manhattan real estate market was the last to fall and the first to rise. In fact, the Manhattan market is back to pre-recession levels for much of the city, especially at the high end of the market. In fact, there are apartment prices that kept rising (like those at 15 CPW), during the recession. Eschewing the overhyped markets in Asia, and the bubbles of Canada, there is a big opportunity in the Big Apple. This may explain why some of the most prominent foreign investors in Manhattan have been from Canada, Hong Kong and China. They understand that the markets in their own countries have become saturated and unsustainable, and are looking for the next big thing – which is once again, Manhattan.
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