New York seen as most attractive city in the US

PETALING JAYA: Housing has picked up in the US and with historically low prices and interest rates, this seems like a good time to buy into the US property market. It is certainly attracting investors from around the world, including Asia.

While certain cities like Las Vegas and Los Angeles remain the most searched cities on US real estate listings websites, New York remains the most attractive city to invest in for Asians, Daniel Bloom of Citywise Real Estate told The Edge Financial Daily in an email interview recently.

Bloom, a licensed New York real estate broker and owner of Citywise Real Estate, said Asians are attracted to New York because like London, it is one of the global financial centres of the world.

“They are attracted by the current discounted prices as a result of the downturn in residential properties, especially in Manhattan, which have fallen by 20% to 25% since the market’s peak.

“On the other hand, in many parts of Asia, property prices have soared in recent years, thanks to low interest rates, ample liquidity and the region’s generally favourable economic prospects.” he said.

According to Bloom, the recent global economic crisis had an impact on property values around the world. However, cities such as London, Hong Kong, Mumbai and New York are magnets for investment.

“These cities are rather sheltered from the global crisis. We may not see the gains that we have seen over the last two decades but prices will certainly continue to rise. And we still have trophy property sales such as a US$88 million (RM272 million) condo purchase by a Russian billionaire. There will always be anomalies and challenges but something the New York market is more than capable of handling,” he said.

Referring to the latest New York market report published by Citywise Real Estate, New York continues to attract investments from around the world with Manhattan enjoying the highest sales in 25 years in the fourth quarter last year.

Bloom said New York is home to some of the most valuable real estates in the world. It offers lifestyle, business opportunities, education and security that attract investment from all corners of the globe. It is home to super prime residences, among them One 57, which will be New York’s tallest residential building from where residents can get a good view of Central Park.

“In addition to being a global finance capital, it is also a major centre for real estate, research, media, fashion, education and culture,” he said, adding that one in 10 jobs in the private sector  is offered by a foreign corporation.

Despite the popularity of New York real estate, inventory remains an issue. “Limited property availability means new areas are gaining in popularity and rental values continue to grow so the Big Apple is providing great opportunities for potential investors and property owners,” Bloom said in the report.

According to Bloom, the far west of 50th Street Manhattan is a more established neighbourhood and there will soon be a revival of the Upper East Side as a result of the Second Avenue Subway expansion due to be completed in 2016.

There is the growing appeal of Battery Park and the developments along the West Coast Highway. Previously, the West Coast Highway would only attract people who work in the financial districts. Now, there are families from all over New York.

“If investors are happy to take a more long-term view, the 2nd Avenue subway is worth looking at,” Bloom said.

To facilitate both city and suburban commuters and provide better access for residents living in Manhattan’s east side, the US$4.45 billion 2nd Avenue subway rapid transit subway project is now under construction. The first phase will be completed in December 2016 and will serve over 200,000 passengers daily. Bloom suggested looking at areas “near the subway stops of 96th Street, 86th Street and 72nd Street as well as around 60th Street”.

Another significant area of interest is around the World Trade Centre site. When completed, it will offer commercial space, a transport hub and a cultural centre with 550,000 sq ft of retail space.

“Limited stock means prices will and continue to rise,” Bloom said. “Wealthy Asian buyers are typically looking to invest 20% to 25% of their global assets in real estate. America remains one of the strongest global economies — it will always attract investments.”

He added that overseas investors mostly prefer apartments with a lot of amenities and facilities.

“Gym, concierge service, fitness centre, high design and finishes and all the latest technology are required. Classy new buildings are favoured in prime locations such as the Time Warner building.

“Some are buying real estate for the long term, while others are looking at a three- to five-year exit strategy after capital appreciation,” Bloom said.

Statistics show that most occupants are renting within the neighbourhoods of New York, save for Staten island. About 77% of Manhattan’s population of 1.6 million people are renting. In Staten island with 470,000 people 36% are renting; Brooklyn with 2.53 million people (72%); Queens comprising 2.25 million people (57%); and Bronx with 1.39 million people (81%).

As a thriving city with residents who have no cars preferring to live downtown, 89.5% of Manhattan homes are within half a mile of a subway or rail entrance, and 98.8% of homes near the financial district.

This article first appeared in The Edge Financial Daily, on June 7, 2013.

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