(New York) - The strong recovery of the housing market is attracting international buyers in record numbers reaching $82 billion in 2012. The National Association of Realtors (NAR) reports that after Canada, the People’s Republic of China (PRC) shows the strongest demand for U.S. residential property.
The Manhattan skyline has long been a magnet for global real estate investors, but travel ten miles away from the island to Flushing, Queens and you'll find Sky View Parc. The development is one of a growing number of properties in New York City and around the country in which Chinese nationals are investing.
Executive, Onex Real Estate
A 1,300-square-foot apartment with a large wraparound terrace sold for nearly $1 million dollars at Sky View Parc. Walking through the building, it's easy to forget you're not in one of Shanghai's glimmering residential towers -- yes, the building is that posh. To some, the appeal of this development is convenience (several big-box retailers occupy the ground floor) and familiarity – Flushing has one of the largest Chinese-American communities in the country.
Others are emboldened by the PRC’s loosening restrictions on the flow of capital and are now looking to invest in American real estate. Evidence suggests these buyers are now expanding their search for properties beyond traditionally upscale areas of the country and New York City. "Brooklyn, the Bronx, Queens, the Chinese are not just buying in Manhattan," said Helen Lee, an executive at Onex Real Estate which developed Sky View Parc.
International buyers were involved in more than 6 percent of U.S. residential real estate deals in the year ending March 2013, according NAR. Those transactions were valued at roughly $68 billion. One out of every eight of these international deals involved a Chinese buyer. Aside from New York, NAR lists the most popular cities for Chinese investors as Los Angeles, Irvine, Detroit, Las Vegas and Orlando.
"They buy them for vacation purposes. Sometimes they buy them for their children so they can go to school in a specific city and rent out rooms in a house," said Jed Smith, National Association of Realtors. "In many cases they buy them for investment purposes."
To understand why NYC would be so attractive to international investors consider some key NAR sales data: New York Metro area condo prices rose 7 percent in the year ending March 2013. Single-family homes rose 5 percent in the same period. Those gains are higher than in other cities targeted by international buyers including: London (+ 2.7 %), Hong Kong (-23.1%), Moscow (+0.6%), Singapore (-13.4%), and Paris (+3.8%).
Recent government data suggests homebuilders are seeing brighter skies and preparing for increased housing demand. The developers of Sky View Parc appear to be following a national trend. Onex Real Estate is planning to build another luxury residential tower in Flushing, Queens. The U.S. Commerce Department reports developers broke ground on houses and apartments in November at a seasonally adjusted annual rate of 1.09 million, the fastest pace since February 2008. Construction of single-family homes jumped 21 percent to the highest level in more than five years. Apartment construction jumped 26 percent.
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