Perspective
19/03/2019
New York has one advantage that few other major cities can lay claim to - its iconic status, which makes it a sure value when it comes to real estate. Starting with Manhattan, where the multiple luxury developments under construction are setting new standards in terms of luxury and services... and prices! One of the best indicators of the market’s robust health is the unprecedented boom taking place in Brooklyn over the past twelve years. American and international families are flocking to its green neighbourhoods and trendy restaurants. Another unmistakable sign is the establishment of major luxury brands in Brooklyn, which now rivals Manhattan!
Following a continued rise since 2011, the market in Manhattan underwent an average correction of 17% over the past two years. In 2018, in Mahnattan, prices have decreased by 8%. The market for coops has stabilised aft er a strong downward revision in recent years due to costly charges. The market in Manhattan and Brooklyn is now favourable to buyers, particularly in high-end properties and new luxury property developments thanks to the wide range of properties up for sale and the numerous new constructions. Furthermore, the cap on property tax deductions at $10,000 per year has had a signifi cant impact on apartments between $1M and $3M, particularly in Manhattan.
Rising bank interest rates combined with the uncertainty surrounding the political decisions taken by President Trump are creating a wait-and-see climate for both buyers who consider that the market will continue to fall and for vendors who do not want to lower their prices. This has resulted in an overall fall in sales by 25% in the last quarter and some buyers choosing to continue renting. Despite this the climate is favourable to investors: buying at the right time and keeping an apartment on medium- and long-term rental. Largely unaff ected by real estate cycles, the city is nevertheless a leading marketplace, particularly for investors given the high rent prices and low vacancy rate (less than 2%).
Floor-through apartments and townhouses are the most sought-aft er properties among families, who prefer to be close to reputed schools, restaurants, shops and cultural centres. Affl uent single people and young couples prefer small apartments with a view. Wealthy buyers favour stunning townhouses and penthouses with luxury amenities, and notably a concierge service.
The Upper East Side has always been one of the most popular districts, particularly between Park Avenue and Fift h Avenue. The Central Park area still has the highest concentration of properties for the most wealthy, with “Billionaires’ Row” (West 57th Street) to the south of the park and its immense ultra-luxury buildings housing some of the world’s most expensive apartments. Tribeca (oft en considered the most expensive postcode in New York) remains highly sought-aft er, while other dynamic areas outside of Manhattan include Prospect Heights, Park Slope and DUMBO in Brooklyn as well as Long Island City.
The most active international buyers originate from Asia, particularly China, South America and Australia. Europeans are returning aft er recording dwindling in numbers since 2014. The economic uncertainty caused by Brexit, the price correction and the strength of the euro may rekindle interest in New York among foreign buyers.
Probably the neighbourhood to watch in Brooklyn! Down Under the Manhattan Bridge Overpass, nicknamed “Dumbo”, is located, as the name suggests, between Brooklyn Bridge and Manhattan Bridge, opposite lower Manhattan. Neglected up until a few years ago due to its industrial character, it has undergone a radical transformation in 10 years: its former repair shops and paper factories have been converted into loft s and shopping centres in a bold and glamorous style. A haven for fans of vintage, old rail tracks can even still be seen in the district, attesting to its past. Dumbo perfectly exemplifi es the spirit of Brooklyn, a paradox of respect for the old and a break with traditional codes. This ultra-hip district is also a major tourist attraction (as well as appealing to families) as it off ers the best views of the Manhattan skyline from its docks.
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