How is the real estate market in New York changing: investments and new projects?

In New York, there is an intriguing situation: on the streets between 49th and 70th Streets, between Fifth and Park Avenue, about 30% of apartments remain unoccupied for at least ten months of the year. This creates a rather unusual scenario, as international investors who invest significant amounts in such residential properties often have no intention of either living in them or renting them out. Their main motivation lies inprotect your capitalThere is particularly strong interest in new projects located around Central Park, as the value of apartments purchased there could significantly increase in the future.

Dynamics of the construction market in New York

The construction market in New York is currently undergoing a period of significant changes: old buildings are being demolished to make way for new ones, and abandoned industrial areas are being transformed into expensive lofts. The process of gentrification is affecting many neighborhoods, contributing to the renewal of the housing stock.

• According to data from the New York Building Congress, in 2013, there were 71% more building permits issued than in the previous year.
• A total of 18,095 permits have been issued for 1,383 buildings.
• This was the first time since 2008 that there was an increase in the issuance of permits across all five districts of the city.

Active construction in Brooklyn and Queens

The highest number of construction projects is taking place in Brooklyn, where more than 1,000 new residential units are planned, which is quite significant compared to Manhattan. Meanwhile, in Queens, the number of building permits issued in a year has increased by 107%. In the Long Island City area, there are plans to build two high-rise towers, each consisting of more than 30 floors and intended for 925 apartments. This project is calledHunter's Point SouthIt will become the largest residential complex built since the creation of Co-op City in the Bronx.

Manhattan Market: Luxury Apartments

As for Manhattan, most of the new buildings here areluxurious apartmentsThe cost is several million dollars, whereas before there were options in both the more affordable and high-end price segments. The modern real estate market in this part of the city is primarily focused on affluent clients, among whom foreign investors dominate. According to Miller Samuel, more than half of the buyers of new developments in New York are foreign nationals.

• The exact share of Russians in this segment is unknown.
• According to The New York Times, their number is comparable to that of Chinese and Brazilian buyers.
• Knight Frank's reports also indicate that a significant portion of the luxury real estate market is occupied by buyers from the UK and India.

Iconic new residential projects

Among the notable new residential projects in New York, the building at 520 West 28th Street stands out. This complex will feature a project designed by a renowned British architect.Zaha HadidLocated next to the High Line Park, the luxury apartments in this building will start at $4.6 million and will feature spacious terraces and floor-to-ceiling windows. The price of the penthouse could reach up to $35 million.

The project at 432 Park Avenue is also generating significant interest in the real estate market and attracting the attention of potential buyers.

New heights of housing in New York

In 2015, after the completion of the new skyscraper standing at 425.5 meters, this building will become the tallest residential structure in New York. The penthouse in this tower is valued at a staggering76.5 million dollarsIn the first quarter of 2015, the completion of residential complexes with 11 apartments is also expected, with prices starting from the mark4.5 million dollarsand are located on the west side of 53rd Street.

Tower Verre project

The completely new Tower Verre, which reaches a height of320 meters, is being built next to the American Museum of Modern Art. The project was designed by a famous architect.Jean NouvelIt is interesting to note that the final handover of this building, which will house...145 luxury condominiumsonly scheduled for2018 year.

The new construction market in Manhattan

According to the company's dataDouglas EllimanThe prices for new buildings in Manhattan are rising significantly faster than for secondary housing. The second half2014was marked by an increase in prices for secondary condominiums6.3%compared to the same period last year, while prices for new properties have increased by an impressive66.3%This indicates a growing interest in primary real estate in Manhattan, which shows positive long-term trends.

Prices for land plots

As reported in the reportBloomberg, inin 2013the average price of land plots used for construction was8,070 dollars per square meterTaking into account the construction costs, the final price per square meter ranged from18 to 26 thousand dollarsIn such a situation, developers strive to achieve a reasonable profit, taking into account all the risks associated with this process.

Competition in the condominium market

Considering all the aspects mentioned above, the market for new condominiums in Manhattan turns out to be one of the most competitive and actively developing in New York. Foreigners cannot purchase cooperatives, which drives their interest in condominiums. As in major cities like London and Hong Kong, international investors often prefer new developments, which typically offer larger spaces and the opportunity to customize the design.

Average housing prices

Data from the companyDouglas EllimanThey show that the average cost of new buildings in Manhattan reached3.5 million dollarsThe analysis of the average price of completed transactions indicates that for Manhattan it amounted to3,520,735 dollarsthat corresponds to a height of66.3%The price per square meter has increased to20,444 dollars, having increased by33.1%.

Comparison with other districts

• Brooklyn:the average price amounted to1,062,152 dollars.
• Queens:the average price was641,477 dollars.

Elite housing segment

In the prestigious Manhattanreal estate market, the share of transactions involving new properties accounts for6.9%At the same time, the average selling price of new buildings reached the mark of17 million dollarsOn the primary market:

• 34.6%apartments cost less1 million dollars (average price – 551,279 dollars).
• 39.4%are in the range from1 to 3 million dollarsIn average1,742,399 dollars).
• 26%the objects exceed the sum of3 million dollarsThe average cost is6,838,800 dollars).

Current market dynamics

Currently, the real estate market in New York is characterized by high activity and significant prices, with the supply of new constructions increasing faster than the level of demand. During the second quarter, there was a recorded increase in listings.14%However, the speed of project implementation is5.1 months, which is a little more than4.5 monthsin the first quarter.

Introduction

Questions about the increase in housing construction volumes and the possible rise in mortgage interest rates may bring some stabilization to the market, but overall, a positive trend in the real estate sector is expected in the coming years.

Conclusion

In conclusion, the New Yorkreal estate market is a dynamic and complex space, where the future of investments continues to attract the attention of both local and foreign buyers. We have seen a significant increase in the number of vacant apartments over the past ten years, which demonstrates not only the desire of foreign investors to preserve capital but also the complexity of the market itself, where mature real estate becomes a means of speculation.

At the same time, the construction sector is finishing ramping up, bringing new buildings to the market that are becoming increasingly expensive. This creates a multiplicative effect of rising prices for new housing, which may lead to a depletion of affordable housing for local residents, likely exacerbating the issue of social inequality in the city.

Market dynamics

The data shows that the demand for the latest projects remains high among wealthy investors, especially foreign ones, which is changing the landscape of residential real estate in major central areas. Gentrification trends are observed in every district, leading to the demolition of old buildings and the construction of elite complexes.

Conflict of interest

As the author of this article, I understand that the process of transforming New York undoubtedly evokes mixed feelings. On one hand, it brings new architectural solutions and improves infrastructure, while on the other hand, it leaves many city residents without the opportunity to afford housing.

Necessary measures

Given the market activity, it is important to pay attention to how we, as a society, can balance the interests of investors with the needs of local residents. This requires both government bodies and private companies to work on creating a more inclusive and accessible housing space.

Only in this case can we talk about real progress for everyone who lives and works in this magnificent yet complex city.