Brexit: A Blessing to New York

The exit of Britain from the EU (European Union) has brought fear and uncertainty to the world at large. While some are focused on the effect of the departure on the economy of Britain, economists have been concerned with the possibility of a new global recession. However, as bleak as the situation seems to be, it appears to favor New York’s real estate market. Imagine that - what seems to be a critical wound for Europe may turned out to be a blessing to New York and its investors. These are some of the areas pointing to how New York will benefit from the entire scenario:

Cheap Financing For Our Real Estate Market 

While our Federal Reserve was on the verge of raising its interest rates from its almost non-existent current ones, the advent of Brexit has created worldwide uncertainty that could culminate in a recession at any time now. The implication of this is that Fed may not carry out that plan to raise rates or may delay the plan until there is more clarity regarding Brexit’s impact. This implies continued cheap financing for our real estate market. There is even the possibility of mortgage rates going even lower.

The possibility of New York taking over from London

London has been a great haven for foreign investors, especially those billionaires who have been looking for a secure place to stash their money.  With Britain’s departure from their long time union with Europe, New York City might be the target of this wealthy class because no one wants to invest in an unpredictable economy. The future of Britain’s economy seems bleak at present. If London has been the center of luxury residential market, especially in high end penthouses, New York should get ready for new investors soon as it will very likely be the next target.

New York City as leading global investment market

There are signs indicating New York City real estate is becoming a leading global investment market, as opposed to international stock and bond markets. Going by the uncertainty affecting the global economy and even the fear of recession in some countries around the world, there is a tendency for investors to leave the financial markets completely for more stable ones, notably real assets. Both the residential and commercial markets in our city are globally viewed as a safe and stable investment.

There is a sudden boost in office sales

Recently, the city has experienced a new trend in one of its real estate markets, office investment. NY and London are the largest office markets on the global scene. For two centuries consecutively, London has maintained being the world’s leading financial capital. One thing that has favored London in maintaining this position is its place in the European Union. This come to an end with Britain’s exit from the EU. Investors would rather consider another alternative with more promising and stable economy than one operating on uncertainty. This is why the runner up, New York is likely next to be crowned. Office investors will definitely shift their focus from London to New York from now on. Even if they later go back to London when the dust settles, New York may have taken the leading position by then – and may keep it.

While we revel in the possible blessings which Brexit could bring us, we might not see any of this occur if Britain’s economic problems spill over to other parts of the world, leading to global recession. But as long as Brexit’s impact remains contained to the U.K., its effects on New York City are likely to be beneficial.

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