Is it still possible to make a real estate deal in New York? Investing in the Big Apple can be daunting. New York, the roof of the world and economic capital of the world's leading power, does indeed have the potential to push prices up.
Yet its many attractions remain, and the economic climate in 2021 suggests that the market is quite clearly favouring foreign investors. We present 3 main reasons to invest in New York.
Summary
An exceptional city in every way
2021, a buyer's market
Rental property in the new districts: profitable investments
An exceptional city in every respect
New York is a city of superlatives. A global financial and cultural centre, the city has a population of 8.2 million and continues to attract a steady stream of tourists. With good reason, the Big Apple is probably the most influential place on earth in areas as diverse as politics, fashion, the arts and the media.
Coupled with the American entertainment culture, New York offers an unparalleled amount of quality cultural activity per capita. It is the city that never sleeps.
New York's economy is extremely strong: more than 200,000 businesses, residential areas close to the city centre, a world-renowned university centre, and above all an international decision-making centre: one in ten private sector employees works for a foreign company based in New York.
2021: a buyer's market
The last decade has seen property prices in Manhattan and Brooklyn soar to levels unmatched by any other city on the planet. As a result, supply has also followed, with many new flats being created. Supply is currently at its highest level in more than ten years, and its overabundance benefits buyers, who are now in a strong position.
A few figures attest to the advantageous position of investors: sales of luxury homes have fallen by around 40%, while 25% of newly built luxury flats in Manhattan remained unsold in 2021.
However, the number of building permits granted has also fallen considerably as a result. As a result, the reverse dynamic in the market is set in motion as the number of available properties will mechanically decrease, while competition for investment increases symmetrically.
Renting in the new districts: profitable investments
The rental market in New York is not about to collapse. The factors that drove rents up remain strictly the same today. The first of these is the very high population density in relation to the small area of the city (mainly Manhattan).
Above all, the disadvantage for landlords of the very protective laws for tenants is also a factor in the increase of market rents: rent control on one million dwellings has led to a transfer of costs to the rest of the market.
Finally, contrary to what most foreign investors think, investing in New York does not necessarily mean buying a luxury condo atop a Manhattan skyscraper. Some neighbourhoods are much cheaper and offer a much higher return on investment. We are thinking in particular of neighbourhoods such as Flatbush, Harlem or even the Bronx. It is sometimes possible to obtain an entire building in these areas for the price of a single flat in the heart of Manhattan.