Many wealthy Chinese businesspeople are turning to New York City for luxury real estate for personal use with potential investment potential always on their mind.
Over the past few years the amount of Chinese buyers has increased significantly in New York and high-net-worth businesspeople are searching high and low for condos within the $500,000 to $10 million and up range. According to Pamela Liebman, chief executive of the Corcoran group, the average purchase is a one-bedroom apartment that goes for about $1.45 million. Many of the buyers are using the apartments for personal use, either as pieds-a-terre or as housing for their children who are studying in the city. Liebman has seen one case where a parent spent $20 million on an apartment for a daughter who was attending college in Manhattan, however the majority of the high-end sales fall at the lower end of the luxury spectrum.
Chief executive of Christie’s International Real Estate, Neil Palmer, said that in general he is seeing that Chinese buyers prefer condos to co-ops and most buyers are not interested in properties as “trophies”. They are often interested in the investment potential for apartments, even if they plan to use it for personal use to begin with.
Surprisingly, real estate prices in New York are cited as the draw for the Chinese buyers. Compared to other cities where they may have otherwise invested, such as London, Hong Kong or Monaco, New York luxury properties are about $1,500 per square foot. In London, for comparison, luxury condos average around $3,600 per square foot, real estate in Hong Kong costs $2,000 per square foot and $4,300 per square foot in Monaco. The current exchange rate also works in favor of Chinese buyers and “newly relaxed banking regulations in mainland China make it easier for investors to move money out of the country,” according to Palmer.
High-end realtors find that the new Chinese buyers tend to prefer the more modern and sleek look to their buildings, like the Time Warner Center. These buildings tend to have the amenities that the buyers are looking for such as swimming pools, fitness centers, concierge services, parking, pet spas and music rooms. They also enjoy high design and high-end finishes because it tends to give an image of long-term value. Cultural preferences also play a role when Chinese buyers are investing in New York. Many will not live on the fourth floor (the number four associated with dead because in some dialects the word rhymes with death) and prefer the eighth floor which is associated with luck and prosperity. There is also a very large Chinese-speaking community in Manhattan that may sway them toward selecting New York over another large city.
Source: New York Times