According to a recent story in the South China Morning Post, property agents based in New York say they have seen a big rise in sales activity from Hong Kong and mainland Chinese buyers since the beginning of this year. The South China Morning Post story quoted Jacky Yeung, who said he chose to buy property in Manhattan because the limited supply of apartments on the island means they will appreciate in value faster than other areas.
“Manhattan has a limited supply and it is the number one financial capital of the world. Also, the US will still be the biggest economy in the world for many years to come,” said Yeung, who is in the process of completing the purchase of two 700 square foot apartments, for which he has paid about US$1 million each.
The story also quoted Weimin Tan, managing director of Castle Avenue Partners at Rutenberg Realty based in New York, who said his firm’s sales volume jumped five times in the first eight months when compared with the same period last year.
Tan said that “Most buyers come from Hong Kong and China,” and in some cases buyers were establishing homes for children studying in New York, he said.
In a recent report on the luxury property market by Knight Frank and CIti Bank, New York was voted the second most important global city after London, and also the second in importance for high-net-worth individuals.
And Tan’s clients were coming from many points in China. ‘We have Chinese clients buying every week,” he said. “They come from Chengdu, Shanghai, and Guangzhou.
The recent increases in property prices in New York, especially compared to China’s recently decelerating values, help to make Manhattan more appealing. “Average property prices in Manhattan increased 9 percent per year from US$328 per square foot in 1997 to US$1117 per sq ft in 2011,” said Tan.
And Tan is not the only agent benefitting from the influx of Chinese with a taste for US property. According to a study earlier this year by America’s National Association of Realtors (NAR), Chinese are now the second biggest buyers of US real estate – after Canadians.
According to agents interviewed for the story, most Chinese buyers are looking at residential properties to buy and then lease out, with the most popular NYC locations being in Manhattan’s Upper East, Upper West and Downtown areas.