The Real Deal New York

Vancouver, San Francisco now outpacing NYC luxury market: Knight Frank

With just a 2.4% increase in property values last year, the party may be over for New York's upscale resi market

March 02, 2016 05:15PM
By E.B. Solomont

Clockwise from top left: Vancouver, San Francisco, New York City and Shanghai

Clockwise from top left: Vancouver, San Francisco, New York City and Shanghai

Maybe the pessimists are right to cast doubt on the strength of New York’s luxury market. High-end residential price growth in the Big Apple slowed substantially in 2015, far behind cities like Vancouver, Sydney, San Francisco and Shanghai, according to Knight Frank’s annual Wealth Report.

In a ranking of price growth among global cities, New York’s luxury property values grew just 2.4 percent in 2015. North of the border, Vancouver’s luxury property market grew 24.5 percent in 2015, the biggest rise among global cities. Sydney (14.8 percent) and Shanghai (14.1 percent) rounded out the report’s top three.

Last year, New York came in at No. 1 on Knight Frank’s ranking after luxury real estate values here increased a whopping 18.8 percent in 2014.

This year, New York fell to No. 39, behind other U.S. cities like San Francisco (10.9 percent), Miami (6.4 percent), Los Angeles (4.7 percent), Boston (3.8 percent) and Washington, DC (2.9 percent).

Despite waning growth here, New York luxury property values still rose at a faster clip than the global average of 1.8 percent.

This year’s report cautioned global investors to be “cautious,” and said price growth is slowing after a strong run, while interest rates and ownership costs for foreign investors are increasing.

In New York, a growing number of voices are expressing concern about the luxury market softening and several developers have lowered price expectations, as The Real Deal recently reported. At World Wide Group and Rose Associate’s 252 East 57th Street, for example, the developers reduced the $19 million asking price for a five-bedroom unit, which is now asking $16.2 million. A four-bedroom unit is now asking $12.4 million, down from $13.4 million.