Luxury apartments in New York attracting buyers from Hong Kong, China

Buyers from China and Hong Kong have been snapping up luxury apartments in New York, especially over the past year. One reason is that property prices in both Hong Kong and China have been overinflated. Another reason is that prices are rising again in New York, and investors in China and Hong Kong are looking to ride this wave of flat price appreciation.

The bottom for New York property was the second half of 2009. As of 2010, prices have been increasing. Not at a fast pace, but at a normal, steady pace.

A recent report from the Foreign Property Investors Association shows that the United States, specifically New York and Washington, is the best location choice for real estate investment for foreign investors. Flats (called apartments in New York) is the top category of property. It is followed by retail, hotels and offices. One reason is that investing in luxury residential apartments is simple and straightforward for the high net worth investor.

Manhattan New York is really cheap compared to similar level cities globally. As an example for a foreign property buyer, the median price for a luxury residential apartment in Manhattan is $1,500 per square foot. In the best buildings, the price is from $3,000 to $4,000 psf. For context, the price in London is more than double the price in Manhattan. In terms of rent, an investor looking to rent the apartment to generate income would expect around 4-5 percent of gross rent (as a percentage of the purchase price). After common charges and taxes, Manhattan’s net return is around 3-4 percent. Compared to Hong Kong and China, this is very attractive..

Perhaps the most important step is to find a reputable New York real estate agent who can guide the buyer through the entire process, including context for the buyer.