China and Hong Kong buyers have been buying New York luxury flats especially over the past year. A reason is that property prices in both Hong Kong and China have been overinflated. Another reason is that prices are going back up again in New York, and China and Hong Kong investors are looking to take advantage of this flat price appreciation wave.
The bottom for New York property was the second half of 2009. Starting in 2010, prices have been increasing. Not at a rapid pace, but at a normal, steady rate.
A recent report by the Association of Foreign Property Investors shows that the United States, specifically New York and Washington, is the top property investment location choice for foreign investors. Flats (called apartments in New York) is the top property category. This is followed by retail, hotel and office. A reason is that investing in luxury residential flats is simple and straightforward for the high net worth investor.
Manhattan, New York is actually cheap compared to similar tiered cities globally. As example to the foreign property buyer, the average price for a luxury residential flat in Manhattanis $1500 per square foot. In top buildings, the price is about $3000 to $4000 psf. For context, the price in London is more than double the price in Manhattan. In terms of rent, an investor looking to rent out the flat for income would expect about a 4-5 percent gross rent (as percentage of purchase price). After common charges and tax, Manhattan’s net yield is about 3-4 percent. Compared to Hong Kong and China, this is very attractive.
Perhaps the most important step is to get a reputable New York property agent who will be able to guide the buyer through the whole process, including providing context to the buyer.