New York bounces back
The urban exodus experienced at the start of the Covid-19 crisis is clearly in reverse in New York, with key real estate market indicators suggesting a recovery is underway.
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The number of Manhattan properties which saw contracts signed in October 2021 has risen by more than 43% to 1,203 compared to the same month in 2020, and the number of listings at 1,777, sit significantly below their five-year average.
Prices at the prime end of the market have been falling for nearly four years, but a return to growth is being witnessed, with expectations that annual prime price growth will reach 5% in 2022, this would represent Manhattan’s highest rate of growth for seven years.
Recent sales volumes provide evidence of the uptick in demand, with the number of completed sales in the year to September 2021 up 47% compared to the whole of 2020, while prices in the borough have held steady.
The relaxation of international travel restrictions should support the market too, with vaccinated overseas buyers once again able to explore the city and view properties in person for the first time in 20 months.
Although the US dollar is strong in overall terms, several currencies have recovered strongly since the start of the pandemic, with Chinese yuan, Swiss franc, euro and sterling-denominated buyers among the most likely to benefit when taking price shifts and currency movements into account.
Coupled with the city’s low purchase costs and lack of restrictions for foreign buyers, New York presents an attractive opportunity.
There’s also good news for investors as prime rents and new leases are accelerating rapidly. According to our partners Douglas Elliman and Miller Samuel, apartment rents increased the most on record in October, driven in part by the return of international students as well as corporate tenants, as companies increasingly call their workers back to the office.
The International Monetary Fund is predicting 5.9% GDP growth in the US for 2022, higher than all other world regions apart from Asia. This scale of growth is only likely to be boosted by the newly signed $1 trillion infrastructure bill which should help finance the Second Avenue subway and a new rail tunnel linking New York and New Jersey.
Photo by Marcus Herzberg from Pexels