New York: International cooperation may boost the real estate market of Manhattan, where high-profile transactions involving foreign buyers are being concluded.
Real estate agents in Manhattan dream of selling the most expensive real estate property available on the market: a 73.5-million-dollar duplex located in Time Warner Centre.
Prices of prestige properties have started to increase again, after Carlos Slim – a Mexican millionaire who is also the richest man in the world – has bought a 44-million-dollar six-storied residential building – the typical brownstones – and a 140-million-dollar office tower in the Fifth Avenue. The value of luxury properties has increased by 12%.
Mr Slim’s purchase reflects the trend followed by overseas buyers. Their choice is justified by the weakness of the dollar and by the prices that remain lower than the peak of 2007. The number of foreclosures is decreasing, but short sales – sales at prices that are lower than the mortgage value – are increasing. A prestigious townhouse in the Upper East Side has been discounted by 25%, more than brokers expected.
Asian investors – Chinese buyers in particular – play a leading role in the real estate market of the United States. Their investments depend above all on the global evolution of the Eastern finance. Investors coming from Hong Kong, China, Singapore and Malaysia search for profitable investment opportunities in New York and Los Angeles, which they consider to be two safe hot investment spots. They also opt for unexpected investment destinations such as Detroit, Las Vegas, Fort Lauderdale, Miami and Phoenix.
On the property market of the United States, investors coming from China and Hong Kong are ranked fourth in the list of the most active investors, coming after investors from Canada, Mexico and Great Britain.
One third of foreign buyers have not succeded in carrying out their purchase transaction due to their difficulty to obtain a housing loan in the United States. It is much more difficult for foreign buyers than for US citizens to obtain a loan for the purchase of a real estate property. Only 45% of investors manage to obtain financing in comparison with the 92% of US citizens. Anyway, their presence on the US property market is destined to keep increasing. The price they are ready to pay to buy a home in the United States is about 220 thousand dollars, 27% more than the average price of apartments on offer, which is 173 thousand dollars.
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