Once, one of the most expensive cities in the world to buy property, New York has come down in price since the GFC much like the rest of the United States. This could represent a good opportunity for property investors to get into this high-end market while prices are at a more affordable level.
Located in the state of New York, New York City lies in the north-east corner of the United States. It is often described as having 5 “boroughs” which are distinct locales that divide the city, these are: Manhattan (the main CBD with Wall St and Central Park), Queens, Brooklyn, Staten Island and The Bronx.
With a population of over 8,000,000 dispersed over just 800 square kilometres of land, New York is the most densely populated city in all of the USA. However, the latest census has revealed that NY’s population has only grown by 166,000 people in the past 10 years which is only a 2% overall net increase or 0.2% per year. (Source: New York Times)
This figure is disputed by some who claim that the census counts are inaccurate due to illegal tenancies and immigrants who were either not counted, or the population was estimated and not counted directly.
This does not mean there are not opportunities though. The Bronx gained 52,000 people in this period whilst Queens had virtually no gain in population. However it is not enough to look just at where the populations are moving, because for capital growth to occur, we need to see demand outstripping supply.
Whilst the overall median dwelling price in New York is around $350,000, median prices in Manhattan are still quite high for the average person, currently around $830,000US. This demonstrates the wide variety of supply/demand factors that occur throughout the city. Manhattan is much higher because it is a highly desired place to live, especially for those who work around Wall Street and are on big incomes. Yet, Manhattan is an island that is fully built out and the only option left is to build upwards which makes it difficult to continually supply more properties to the area.
Before deciding to invest in New York, it would be wise to check all the normal indicators to determine what area has potential for future gains. These indicators include vacancy rates, population growth, job opportunities, transport and infrastructure.
Also, at the time of writing, the US is currently facing another debt crisis with congress failing to reach an agreement on the pending debt default in early August. If they cannot sort this out it poses a big risk to the US economy which will no doubt have further impacts on real estate. It would probably be wise to wait until this has been resolved before committing to investing your money there.
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