News / Economy

Foreign Buyers Snapping Up Luxury Manhattan Apartments

Foreign Buyers Snapping Up Luxury Manhattan Apartmentsi
X
July 03, 2014 2:19 AM
Foreign buyers of apartments in new condominium towers are flooding into New York City, where even the highest-end real estate is a relative bargain compared to other world capitals. Canadian, Chinese and Russian buyers make up the bulk of these foreign investors in Manhattan’s prime neighborhoods, some paying in the tens of millions of dollars or more for apartments sight unseen. VOA’s Carolyn Weaver has a report.
Carolyn Weaver

Foreign buyers are helping boost skyrocketing prices for high-end condominium apartments in Manhattan, where real estate is still considered a bargain relative to most other financial capitals. Realtors say Canadian, Chinese and Russian buyers make up the bulk of non-U.S. investors in the borough's most expensive neighborhoods.

Slender, glass-clad buildings overlooking Central Park, with just one or two astronomically priced apartments per floor, are the most sought after. At "One57," a 90-story tower on West 57th St. that is still being fitted out, many of the apartments have already sold. Two reportedly went for more than $90 million each.

One57 sales director Jeannie Woodbrey recently showed what she called one of the building's smallest apartments, a 300-square-meter unit priced at nearly $19 million.

"It's a three-bedroom, three-and-a-half bathroom," she said. "The ceilings are 10 ft. 7 in. [3.17 meters], our lowest ceiling height, and Christian de Portzamparc, who was the exterior architect, designed walls of glass, so you really have no break in the views whatsoever, and that's really the drama in all of our apartments."

From the 41st floor, Central Park is laid out like the biggest front lawn in the universe. On higher floors, the apartments seem to float above it. Some interior walls are leather clad. Bathtubs carved from a single slab of marble had to be hauled up on the exterior of the building, Woodbrey said. The building's developers spent two years working with Italian quarries to assemble marble wall panels with matching veins.

About half the new owners are from outside the U.S., Woodbrey said. Nikki Field and Daniel Chang, brokers at Sotheby's International Realty, have sold several apartments in the building. They often travel to China to meet new clients.

"One of the most stunning changes in our industry came about in January 2009," Field said, referring to an International Herald Tribune survey of prices in global capitals.

"They found that Moscow was 36 percent more expensive than London, and Hong Kong was 78 percent more expensive than London. And New York was 17% less expensive than London," Field said. "It didn't take long for our phones to begin to ring."

Some foreign buyers purchase an apartment for a child who is attending college in New York, she said. Others buy multiple U.S. properties, even sight unseen.

For Chinese clients, in particular, Chang said, the U.S.'s secure property laws are a draw.

"I think the U.S. has really a stable political environment. It's kind of [like putting] a safe deposit box in the city that it will pay for itself, it will appreciate, and they don't have to worry about any property being confiscated," he said.

U.S. laws also make it possible to buy real estate anonymously through holding corporations, another attraction for the global super-rich, according to a New York magazine investigation, which calls Manhattan real estate "the new Swiss bank account" and "stash pads in the sky."

In the last few months, Chinese buyers outnumbered Russian purchasers of Manhattan properties for the first time. They now are second only to Canadian owners, such as dual Canadian and American citizen Diane Francis, who has a pied-à-terre down the street from One57. A financial journalist, she wrote in defense of the phenomenon for the New York Post.

"The new mayor of New York seemed to be very anti-investment, thinking prices were going too high, the buildings were getting too high," Francis said. "And I just said, 'Hey, wait a minute, we're the solution, not the problem to your economic issues. We employ people, we spend billions, we invest here, we buy your theater tickets, ride your cabs. Don't call us pied-à-terrorists.’"

Francis notes that by 2020, more than 47 million people around the world will be millionaires, with at least $1 million of net worth beyond the value of their homes.

"We have enough money to go where we want and buy second homes to have fun, or certainly to immigrate permanently, if we want to," she said. "So this money is sloshing around looking for real estate as an investment, as an asset diversification."

Some foreign buyers of U.S. property, she said, "are fleeing regimes that they're concerned about destabilizing, or currencies they're worried about. Or in the case of China, and I don't want to besmirch all the Chinese coming to New York and the U.S. to buy real estate, but there is a crackdown on corruption in China, and a lot of people have hidden away money that they haven't told the government about, and they want to get it out. And they're getting it out by buying a condo here in someone else's name."

One57, or "Oligarch Arms," as Francis dubs it, is now the most expensive residential building in the city, and at 306 meters, the tallest in the Western Hemisphere. But it will soon be overtaken by even taller, equally slender and costly apartment towers going up near Central Park.

To critics, the ultra-luxury apartment towers are a sign of rising inequality, and contribute little to the city. Many are empty most of the year, and owners whose wealth is acquired outside the U.S. don't pay income taxes. High-end new buildings also often receive huge property tax breaks: An apartment at One57 currently listed at $36 million will be taxed under $500 a month.

Even defenders agree the trend is helping to drive up real estate prices throughout the city, making New York increasingly unaffordable for those who are not rich.

The trend may soon accelerate for non-luxury real estate as well, and not only in New York, Francis said. Zillow, a website that lists every U.S. property and its price history, will be published in China in Mandarin beginning this month.

"The Chinese market will explode," Francis said. "People in Beijing will be able to sit down and buy something online, and contact a real estate agent to do it for them remotely."

You May Like

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video US Diplomat Expects Adoption of Bosnian Massacre Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs UN countermeasure More

America's Most Exotic Presidential Pets

From alligators to bears, the White House has been home to some unusual presidential pets over the years More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Olympics Construction Scars Sacred Korean Mountaini
X
July 02, 2015 4:10 AM
Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs

World Currencies

EUR
USD
0.9012
JPY
USD
122.90
GBP
USD
0.6400
CAD
USD
1.2582
INR
USD
63.438

Rates may not be current.