The Wealth Report showed increasing real estate funding and development from global sources, an important and interesting development. The report is an in-depth commentary on worldwide prime property markets, wealth distribution, and investor sentiment composed by property consultant Knight Frank. Although it covers the major markets around the world, our readership is most interested in developments that impact the New York City real estate market.
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New York remains a powerhouse, which has positive implications for real estate. London and New York retain their lead as the top global cities, according to the Global Cities Survey. In fact, it is expected to overtake London for the top spot by the year 2024. This survey measures economic activity, quality of life, knowledge and influence, and political power, to attain the rankings.
The report also delves into the luxury property market. New York posted a very respectable 10.4% gain, ranking 16th amongst the top 85 cities around the world. Still, a double-digit price increase in one year is very respectable and shows there may be room for further gains going forward. The report cites positive momentum across the globe since the dark days in the aftermath of investment bank Lehman Brothers’ collapse. In fact, the report believes the event hastened the recovery in prime property markets due to the resultant slashing of interest rates. This includes quantitative easing (QE) in the United States by the Federal Reserve, which helped lower long-term interest rates for a sustained period. If this is unwound too quickly, it could harm property prices. However, the Fed has maintained a commitment to slowly tapering QE.
Looking ahead, ultra-high net worth individuals are likely to continue cross-border real estate purchases, according to the report. As economic growth slows in their own countries, buyers from China, Brazil, Turkey, and Nigeria will target properties in the U.S, U.K, Germany, Australia, and Dubai. Moreover, with globalization, buyers from China, India, and Hong Kong will be more comfortable making a real estate investment in luxury developments, including N.Y. since they will increasingly recognize homegrown developers.
Given New York’s prominence as a global metropolis, the report is an interesting in-depth study of worldwide prime property markets. In an increasingly global economy, it examines various influences on prices, which show New York could have further price gains.