While the dollar has fallen to new lows against most major foreign currencies, most foreign investors have shied away from investing in American real estate due to the subprime mortgage crisis.
Furthermore, the subprime problems are the second major financial crisis in less than a decade that has as its root cause a lack of adequate government regulation and oversight. Hence the large number of economic analysts that have argued foreigners have grown understandably wary of U.S. markets. While the
United States used to receive a transparency bonus for our famously reliable and detailed economic and financial statistics, the U.S. is now being
penalized by foreign investors concerned about more hidden troubles caused by a deregulated financial industry.
New York City, however, has largely been sheltered from the subprime woes that have enveloped the rest of the country. Because of this and several other factors, the city's real estate prices are largely expected to increase over the next several years.
Furthermore, most new New York apartments are condominiums. Unlike the old coopertively owned buildings that used to be about all the city had to offer, condos are one of the most liquid investments in real estate available to the regular buyer. That is, a condo can be bought and sold relatively easily with comparatively little extra costs of time, effort and money.
This trifecta a low dollar, rising prices and reasonably flexible ownership structures has become too much for foreign buyers to ignore. In numbers that are growing fast enough to make most major business media outlets take notice, foreigners have been purchasing condos and other properties across the New York City skyline.
Greater freedom and growth in global financial markets has allowed for an increased demand among foreign investors for New York real estate, with demand for new Manhattan condos being particularly strong.
South Korea, for instance, has recently raised the limit it places on its citizens' foreign investments from one to three million dollars.
High rent prices in the city have also pushed many potential renters into the buyers column. According to a recently released report on the nation's rental markets, rent prices have climbed 3.6% in the last quarter alone, a rate of growth that outpaced every other market the report covered.
Higher rental rates in the future which are also expected for all of Manhattan also makes purchasing an apartment more attractive for investors.
