NYC Apartments a Better Investment than Gold, Says Expert

Posted On Tue, April 21, 2015 By

Posted On Tue, April 21, 2015 By In real estate trends

A midtown apartment filled with modern art designed by Robert Couturier

Laurence D. Fink, chairman of Blackrock Inc., the world’s biggest asset manager, said at a conference today in Singapore that luxury apartments in cities like New York, as well as modern art, have trumped gold as a store of wealth.

According to Bloomberg, Fink said, “Gold has lost its luster and there’s other mechanisms in which you can store wealth that are inflation-adjusted…The two greatest stores of wealth internationally today is contemporary art… and I don’t mean that as a joke, I mean that as a serious asset class. And two, the other store of wealth today is apartments in Manhattan, apartments in Vancouver, in London.”

Bullion bars have long been the traditional place to store wealth during conflicts or inflation periods, but since peaking in 2011 for as much as $1,921.17, its price dropped 38 percent, trading at $1,199.13 this morning. Things are, however, looking slightly up. As Bloomberg explains, “Holdings in gold-backed ETFs totaled 1,621.7 metric tons as of Monday, 1.5 percent bigger this year after contracting 9.3 percent in 2014… The funds trade like shares, enabling investors to own bullion without taking physical delivery of it.”

But with apartment prices climbing higher and higher — the average sale price in Manhattan in 2014 reached a new record at $1,718,531–people are ditching gold for real estate. The trend is especially true for foreign investors looking to store their wealth elsewhere. Case in point, in 2014, around 50 percent of all $5 million+ sales were to shell companies, most of which were foreign, as we reported earlier this year. And once you have the pricey apartment, why not fill it will contemporary art to store the rest of your wealth?

[Via Bloomberg]

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