Mandarin Oriental, New York
New York real estate continues to perform strongly with some of the most expensive sales in history taking place this year, according to a new report by CityRealty.
Prices for the CityRealty 100 buildings have increased yet again this year, bringing the average price per square foot to $2,790. The strong stock market and popularity of the city make luxury condominiums a stable investment during this time.
"It’s a very expensive market," said Gabby Warshawer, director of research and communications at CityRealty, New York. "So many of those buying in now, both domestic and foreign, are those who have seen their wealth and investments grow with the strong performance of the stock market and the gradual return of the economy."
The CityRealty 100 semi-annual report tracks the performance of the top 100 condominium buildings in New York's Manhattan borough through March 31.
High performance
The most expensive condominium in New York City is 15 Central Park West, which has maintained that position for the past several years. The average price per square foot is $6,339, and it shows a compound annual growth rate of 5.1 per cent.
Department stores like Saks Fifth Avenue make New York appealing
Some of the other condominiums that also topped the list of the most expensive include One57 at 157 West 57th Street, One Beacon Court at 151 East 58th Street and the Residences at the Mandarin Oriental at 80 Columbus Circle.
Wealthy individuals looking to invest in real estate can count on the luxury condominium market to remain strong for the next few years. For example, the compound annual growth rate for New York real estate is significantly higher than oil.
Condominium sales have continued to increase in recent years
“As an investment, New York real estate continues to perform strongly, seeing ten-year annualized growth at 6.1 per cent,” Ms. Warshawer said.
The two most expensive condominium sales in New York history were at One57 in the past six months. The most expensive apartment sold for $100.5 million, and the second most expensive sold for $91.5 million.
Despite these two historic sales, the price per square foot at 15 Central Park West remains slightly more expensive. The two buildings will likely continue to vie for the title of most expensive building in the upcoming year.
New York is an international destination
Future forecast
It is still unclear whether these luxury condominiums will remain popular when millennial consumers begin purchasing real estate at a steadier rate. Millennial consumers have radically different preferences compared to their Boomer parents when it comes to purchasing luxury real estate, according to a report by Unity Marketing.
The market for high-end real estate has changed drastically over the past decade, and differences between Boomers and Millennials play a considerable role in influencing current trends. After a brief post-recession rebound in recent years, the luxury real estate market is now settling into steadier pace that will require professionals to cater to Millennials’ new preferences (see story).
Current trends show that wealthy Boomers are increasingly purchasing real estate in the Caribbean, which could have an affect on the New York luxury condominium market. A confluence of positive developments is recasting the Caribbean as one of the top regions for ultra-high-net-worth consumers looking for sound investments, according to a new report by Wealth-X.
Barbados in particular is a market with promising real estate opportunities due to lax regulatory policies and a burgeoning luxury landscape. Behind-the-scenes of this boom in roving real estate interest is an aging UHNW population looking to protect wealth (see story).
Nevertheless, New York condominiums remain a popular choice for many wealthy individuals looking to invest in real estate.
"It’s a very expensive market," Ms. Warshawer said. "Many of those buying in now, both domestic and foreign, are those who have seen their wealth and investments grow with the strong performance of the stock market and the gradual return of the economy.
Final Take
Kay Sorin, editorial assistant on Luxury Daily, New York