Unlike its Asian counterparts, Manhattan continues to welcome wealthy investors from overseas. Hong Kong and Singapore have effectively curbed foreign – mostly Chinese – interest by adding ten and 15 percent stamp duty taxes, respectively. France sought, albeit unsuccessfully, to introduce exorbitant new taxes (75% tax) on the upper class, and the rest of Europe is in crisis mode. Chinese investors are seeking safe havens for their wealth, and Manhattan fits the bill.
Miami has also extended an open invitation to foreign investors, particularly those from South American countries such as Colombia, Brazil, Argentina and Venezuela. Uncertain economies and political instability have driven interest in the stable, Portuguese and Spanish-speaking communities in Florida.
As for Canada, foreign investment in cities such as Vancouver and Toronto has led to bubbles in the market. Speculative and overseas buyers drove prices up 100% over fifteen years, and now the market activity is plummeting. Sales have hit ten-year lows, and are now down 23 and 34 percent respectively. It is expected that the bubble will burst this year, or at least deflate by 10-25 percent, as property prices stabilize.
Around the time of the Winter Olympics in 2008, Vancouver, BC was seen as the world’s most livable city for five years in a row. A massive influx of foreign investment flooded the market, and detached houses in the Metro Vancouver area rose to an average of cost $1.1 million. Downtown condos, once eagerly sought after by Hong Kong buyers, soon were selling for $1,000 per square foot. However, a few years later, an Olympian hangover set in and Vancouver soon lost its livability crown, and foreign investment dried up. After a year of plummeting sales, a crash is looming on the horizon.
In Manhattan, luxury real estate has seen an incredible boom in the last few years, and this upward trajectory continues as quickly as new luxuriant skyscrapers stack higher and higher to keep up with the growing demand. 57th Street is now a monument to exclusivity and luxury. The hottest address on the planet keeps growing, upward and outward, but there is only so much space left for those who want a piece of the best for their very own. Miami has seen estates fetch record-high prices in 2012, and extravagant projects abandoned during the economic downturn have picked up steam once again.
While the rest of the world wrestles with uncertainty, or keeps its borders shut to outside investment, the United States continues to lift its lamp beside the golden door for all those who wish to own a piece of the American Dream.
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