An oversupply of product has led to slowdown in New York’s luxury real estate market, but sales of “ultra-prime” properties are continuing to climb.
Citing a Knight Frank study, Bloomberg reported that 153 properties in six cities worldwide sold at an average $43 million a house, or a total of $6.6 billion. Over the past year, 39 residential sales in New York were valued over $25 million, totaling $1.5 billion. The priciest section of New York’s residential market increased by 50 percent between 2015 and 2017, according to the report
These figures are in stark contrast to the rest of the city’s residential market, which saw an 8 percent decrease, year-over-year, in overall transaction value in the second quarter.
“In New York’s case, the story has been about the slowing market,” Liam Bailey, the global head of research at Knight Frank, told Bloomberg. “But the background is that the market has actually grown in sales, but there’s just that much more property to purchase.”
The high-end price growth in New York has been seen in other markets, too. Hong Kong had the most number of high-end sales valued over $25 million, ahead of New York, and then London.
Los Angeles also performed well, though its ultra-luxury market was down from its peak. In 2015, there were just five transactions above $25 million. In 2016, that number grew to 16, but last year there were just 12 transactions above $25 million. The average sale was $38.4 million.
According to Bailey’s research, there were about 130,000 people globally with investable assets worth $50 million or more. [Bloomberg] — David Jeans