New York City began as a city of immigrants and has maintained a long and laudable history of welcoming foreign travelers and residents. In recent years, residential real estate sales have glowed even brighter for buyers from overseas. Some see it as fulfilling their dream to take a bite of the Big Apple; others buy here to add to their property portfolio; while still others purchase apartments for their (lucky) college-age children. Whatever the buying motive may be, the trend has turned Manhattan into a recession-proof real estate island.
Very Big Money
According to the National Association of Realtors, from March 2010 to March 2011, sales from buyers overseas amounted to a total of about $82 billion, up from $66 billion, meaning about 8 percent of all U.S. home-buying transactions. However, in New York, though the origins of buyers have changed through the years, the piece of the pie has remained at about 15 to 20 percent.
For example, during the 1980s, most foreign buyers of New York City residential real estate were from Japan. Then in the 1990s, the Middle East and Russia brought the money, and Israel lifted its ban on citizens of that country buying property overseas, creating a surge of Israeli buyers at the end of the 20th century. In the mid 2000s, a boom in the Irish economy sent buyers from Dublin to New York City and, most recently, a flurry of European buyers made the most of the strong Euro.
Foreign buyers today hail from pretty much every country you can think of, but Irish and Middle Eastern buyers are still making a big dent, with Asian and Latin American purchasers gaining quick ground. Plus, with the city’s record-setting $88 million purchase of a Central Park West penthouse by a Russian fertilizer magnate for his college-aged daughter, it’s clear that the former Soviet Union is still very much interested in the Big Apple.
Serving the Demand
According to Wei Min Tan, founder of Castle Avenue Group within Manhattan-based Rutenberg Realty, upwards of 50 percent of his clients are foreign. “About four years ago, a lot of foreign buyers were European,” he says. “But that’s tapered off a bit because of the European debt crisis.” Tan now sees an uptick in interest from both China and Brazil, while Gea Elika, owner of Elika Associates in Manhattan says he feels it’s somewhat of a “moving target” and has noticed increased activity from Australia, Greece and Spain. One of Elika’s recent clients from Australia bought a multimillion-dollar unit in a classic West Village building sight unseen.