Can “a real New York bargain” carry a multi-million dollar price tag?
The answer is an emphatic “yes” if the product in question is real estate — and if you’re comparing it to property in other parts of the world.
There are a number of global cities where prices are far higher than they are in the Big Apple. “We’re a bargain, and that’s the way it’s been for a number of years,” said Kevin Brown, an associate broker for Sotheby’s International Realty, who has a long list of clients from Asia. “We’re perceived as value.”
And the prices differentials are pretty astounding in some cases.
For example, in Monaco, the most expensive market in the world, homes average $6,200 per square foot, according to the most recent Wealth Report from London-based real estate consultancy Knight Frank.
By comparison, the average price in Manhattan was $2,300 a foot as of March, according to the report. That’s 60 percent less, though appraisal guru Jonathan Miller pegged the Manhattan average at $2,735 in the second quarter (see related story).
Hong Kong, London and Singapore are also pricier than New York, which ranked sixth on Knight Frank’s top 10 list, two notches higher than the year before. The cities were ranked based on the top 5 percent of their sales during all, or part, of 2013.
While the ranking includes several locations in Asia and Europe, Middle Eastern and South American cities are noticeably absent: For all its vast investments in luxury development, for instance, Dubai did not crack the top 10. Neither did Sao Paolo, Brazil, though both were price leaders in their regions, the data show.
And faced with a softening housing market, much of it by governmental design, the four Asian cities on the list may see prices drop soon.
In addition, New York is narrowing the gap with some Asian cities, where values are sliding after a massive multi-year run-up, brokers say.
“Prices are softening,” Brown said, adding that government efforts to keep real estate bubbles deflated seem to be working, especially in China.
“The Chinese government works in the same fashion as co-op boards do here in Manhattan,” he said. “They are the breaks in the marketplace so as to control runaway speculation.”
This month, The Real Deal looked at the priciest markets on the planet for residential real estate and at how they stack up against New York.