The year 2015 was
a banner year for the ultra-wealthy. It was a year in which the rich set
records for their luxury real estate investments and high dividends. For
instance, a Manhattan penthouse was sold last year for a record $100 million,
while a Picasso was auctioned for $179 million. With the start of the new year
however, the situation seems to have changed dramatically. On the heels of
record prices set the previous year has come a surprise reversal, where values
of assets that appreciated in the just previous year have dropped, and we are
now experiencing a downward trend. This has resulted in various price
reductions, several auction deals going unsold and a growing inventory of unsold
high end real estate.
There are a number
of factors contributing to the sudden decline in the demand. Some of these
include: the slowing Chinese economy, the prospect of increased interest rates in
the US and the collapsing price of oil and other essential commodities. These
factors are enough to make the high-spending ultra-rich from China, Russia and
Brazil much more cautious.
The change has led
some luxury real estate sellers in Manhattan to slash their prices. Despite
several cuts and reductions, properties have been left unsold. Those that
bought luxury real estate with the intention of flipping for higher prices this
year are likely to be disappointed, as these investors have missed the peak of
the market. This is evident in the sale of an apartment that was bought for
20.3 million dollars last year which is now being sold for a loss of 2.5
million dollars this year. While this situation illustrates New York’s present
real estate market, there are similar trends in other cities of the world,
especially in London which has experienced a notable decline in luxury
properties sales.
Please visit us at: www.RubenPerezNYC.com
No comments:
Post a Comment