Photo via Pixabay
Over the past decade, there has been no shortage of headlines about the impact of foreign buyers on the New York City real estate market. At one time, the headlines about Russian oligarchs and Chinese business tycoons buying up luxury properties in New York City were true, but as of 2019, the real estate market in New York City and across the country is shifting. New restrictions on foreign buyers combined with a perception that the United States is no longer a friendly market for foreign buyers has slowed foreign sales. In fact, over the past twelve months, the highest closes in New York City have all been to U.S. buyers.
What’s the deal?
For the past decade, the number of Chinese tourists visiting NYC has been on the rise, and of the city’s record-breaking 60.3 million visitors in 2016, more than 950,000 were from China. This is a “sevenfold increase since 2007,” reports the Times, which notes how the city’s tourism department, NYC & Company, is catering to the growing demographic, as they’re spending more freely than visitors from Europe who have seen the value of the euro decrease in comparison to the dollar.
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, Fri, September 25, 2015
For wealthy Chinese, Manhattan real estate has long served as a secure place to stash their cash, with these investors gobbling up high-end properties. In fact, “foreign direct investment in U.S. real estate rose to $104 billion in a 12-month period ending March 2015, a 10.4 percent rise over the prior year,” according to The Real Deal. Of these foreign buyers nationwide, the Chinese make up 16 percent. And accompanying this rise, at least in NYC, is the rise of the all-cash buy. To show just how prominent this trend has become, RealtyTrac released data that shows in the first half of the year, 75 percent of Manhattan’s cash buyers had Asian surnames.
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Old Westbury Gardens, a Gold Coast mansion also known as “the Gatsby House”, © Old Westbury Gardens
In recent years, the Manhattan real estate scene has had a major upswing in the amount of wealthy buyers from China, who feel that New York City condos and other properties are a safe place for their money. In fact, high-profile real estate firms are even tapping Chinese brokers to cater to this growing clientele. But now the trend is moving east, with Chinese buyers eyeing the stately mansions that make up the Gold Coast suburbs of Long Island. According to the Times, “Some Chinese buyers are parking money in what they see as a low-risk investment. Others are seeking a trophy home. Still others are intent on living in these places full time while their children attend the area’s high-performing schools.”
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After our commute this morning we couldn’t help dreaming of getting out of this city for a couple of weeks (or months, who’s counting), but 56.4 million people had the exact opposite idea in 2014. That’s how many tourists visited the big apple this past year, smashing the previous record of 54.3 million visitors in 2013. One country that helped with the increase was China, not surprising considering the growing trend of wealthy Chinese investing in the NYC real estate market. According to the Times, “City officials estimate that more than 740,000 visitors came from China in 2014, almost five times as many as in 2009.”
More on the record-breaking tourism trend
The Oosten condos in Williamsburg, Brooklyn, overseen by Xin Development Group of China
It’s no surprise that Chinese investors, who feel that New York City condos and other properties are a safe place for their money, are making major waves in the real estate market, so it makes perfect sense that high-profile real estate firms are tapping Chinese brokers to cater to this growing clientele. These international deals come with many complexities in addition to the traditions and language of the buyer, and having a broker who can easily navigate the process makes closing the deal that much more certain.