NYC for sale in the foreign press
January 14, 2008 12:16PM By Amy Miller
Trump Soho
From the January issue: Steven Toumbas, an equities investor in London, is a shining example of the type of buyer foreign newspapers are fawning over these days. He's taking advantage of the tumbling dollar and falling U.S. real estate prices to make his dream of buying a second home in Manhattan a reality. Toumbas planned to buy a 540-square-foot luxury apartment in the Trump SoHo listed at $1.2 million, London's Financial Times reported Nov. 10. At then-current exchange rates, it would only cost him about £572,000, or 820,000 euros, but he decided to wait for even more of a discount. As the dollar has plummeted in value against foreign currencies in recent months, journalists overseas and across the Canadian border are offering potential buyers advice on how to how to make the most of a rare opportunity.
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Comments
Mr. Real Deal
Although this is not the first time foreign speculators have been able to take advantage of currency conditions , it is maybe the first time that much of the listing information is readily accessible to speculators of all levels through the internet with this currency condition. The last time the dollar was this weak relatively speaking , was in the mid to late 70s. I think many actual buyers would never have been able to learn of the opportunity or do enough due diligence to feel comfortable to invest in a given property. As long as massive global liquidity remains a constant, the communications revolution will let many 'international venues' stay afloat regardless of their host countries economic conditions.
Comment #1 Posted By: Mr. Real Deal 01/14/08
anon
This is genius. "most of the Irish buyers she deals with purchase one or two apartments at a time, and they don’t even travel to New York beforehand." “Even if they could afford to buy in Dublin, they could not get rent anywhere near what they get here,” Moriarty said in the article. If ever there was a peak, this is it. Foreign money is truly dumb money. Rents don't even come close to covering carrying costs in NYC. The local economy is sinking, Wall Street is abysmal, but god bless idiots from Ireland who will pay for overpriced properties sight unseen.
Comment #2 Posted By: anon 01/14/08
Mr. Real Deal
Sure the rent won't carry it , but when your mortgage on a property is lessening by the month would you really care? The dent you can make in the principal by the time the dollar does make its way back could be substantial.
Comment #3 Posted By: Mr. Real Deal 01/14/08
anon
Mr. Real Deal - not sure I get your logic. If you're saying that the mortagge is lessening by the month because you're paying down principal, why is that unique to foreign buyers or even an investment consideration? Even though that applies to anyone buying a property (not just a foreigner), we all know that early payments are nearly all interest, so it takes quite a while to repay principal. While this is happening (1) you're making mortgage payments that even after taxes are 30% greater than the rental income and (2) you're taking a HUGE risk as the market continues to soften and you lose real equity. Or are you saying that the mortgage is declining because the dollar is weakening? Then your equivalent rent is declining by the month as well!!! Either way, there are much less risky ways to play the currency game, particularly in a softening NYC real estate market. Let's face it, foreign investors are even dumber money while the market here is softening. That of course is why brokers are having to rush off to Europe to sell NYC real estate.
Comment #4 Posted By: anon 01/14/08