Foreign buyers have long been a mainstay of New York real estate, but it seems like their purchasing habits are revolving less around pricey pieds-a-terre that are left empty for much of the year.
Instead, driven by a variety of factories, many international buyers and now looking to buy homes for their families – turning their focus away from the ritzy gold coasts of the Manhattan market and rather laying roots in neighborhoods like the Far West Side, Long Island City and parts of Brooklyn.
Those factories range from political instability in Brazil to policy shifts in Russia to weakening economies in Europe and currency devaluations in China, according to the New York Times.
In turn, foreign buyers are conducting more due diligence than ever, viewing their purchases less as an investment and more as a lifestyle decision.
“We really want to raise our kids in a more relaxed environment, where they can be free and just walk to school without having to worry about safety,” Mauricio Amaro, chair of Santiago, Chile-based LATAM Airlines Group, told the Times.
While foreign buyers make up about 15 percent of the overall Manhattan residential market, their presence is much larger in the condo market – where they drive roughly one-third of sales, according to Jonathan Miller of real estate appraisal firm Miller Samuel. And they’re even more prominent buyers of new developments, where they buy roughly half of all units, Miller said.
That sort of prominence has placed foreign buyers under new scrutiny, with the de Blasio administration imposing new disclosure requirements on shell companies – the largely anonymous entities through which many high-end purchases are made.
Still, as global wealth increases and New York continues to be viewed as a safe bet – both as a real estate investment and a place to live – the market for foreign buyers is only expected to ramp up alongside increasing condo inventory in the city.
“I’m waiting for the Indians to show up,” Raphael De Niro, an associate broker at Douglas Elliman, said. “I know they will because they have an exploding middle class and a strong economy, but they will be mostly focused on the $3 million and below range.” [NYT] – Rey Mashayekhi