Overseas buyers account for half of new york property sales

The report analyses the US property market to assess how strong the recovery has been.

Four years since it was announced that the US recession was over GDP growth stands at 1.8%, unemployment is hovering around 8% and wages are struggling to rise above inflation. Despite this, according to Knight Frank, mainstream house prices in the US are now 9.3% higher than a year ago and new home sales are at their highest level for five years.

“In New York and Miami – following the artificial spike in activity created by the fiscal cliff at the end of 2012 – most analysts predicted a slowdown in 2013 but were proved wrong,” explains Kate Everett-Allen.

Indeed, the median price of luxury condos in New York rose by 8.2% in the year to June, and by 5.9% in Miami. Now, international buyers account for around a third of sales above $3m in the New York sales market but closer to 50% in its equivalent new homes market.

The key driving factor in price growth is supply; the number of apartments for sale in Manhattan is currently at a 12-year low. Unable to secure finance, potential vendors are staying put, limiting the turnover of homes in all but the new homes market.

“The housebuilding pipeline was effectively turned off in 2007 and both Manhattan and Miami sold only a ‘shadow inventory’ up until 2012 when new projects began to complete,” adds Everett-Allen. “With the development cycle lasting approximately two years we are only now starting to see these projects enter the market. Absorption levels are high, particularly in New York, even at prices of $4,000 per sq ft and above.”