New york top for global property investors
Photo: Lowermax
New York is the number one city in the world for property investors, according to a new survey. The annual poll of the Association of Foreign Investors in Real Estate saw the US city knock London down into second place, after the UK capital rose into the top spot last year. Indeed, with the exception of 2014, New York has been the most popular investment destination four times in the last five years.
The AFIRE represents firms from 21 countries around the world. Combined, its members have invested an estimated $2 trillion or more in real estate assets under management globally.
America tops the buying list, thanks to its recovering economy. Recent reports from the National Association of Realtors have seen cash investment from overseas decline in US real estate, as prices moderate after a period of significant booms.
That stability, though, saw the US voted the most secure country for investment, outstripping both second-place Germany by 55 percentage points in the AFIRE survey - and third-place UK by 60 percentage points.
Indeed, more than 90 per cent of survey respondents say they plan to maintain or increase the size of their US portfolio in 2015.
The US also offers the best opportunity for capital appreciation, out-performing second-place Spain by 34 percentage points and third-place U.K. by 40 percentage points.
Within America, New York is the place to buy, reveals the survey, with the US city leading San Francisco, Houston, Los Angeles and Washington in the rankings. Washington fell one place from fourth last year in the US city rankings, while it places 15th among global cities, down from last year when it was 10th.
"For foreign investors, the allure of Washington, D.C. never fades," said James A. Fetgatter, Chief Executive, AFIRE. "But unlike other cities which currently have technology and energy drivers, D.C. mostly depends on the U.S. government to keep occupancy in balance; given the current situation, Washington area real estate is the short-term, unintended victim of Federal budget tightening."
Two-thirds of survey respondents expect China to become the largest source of capital into the U.S.in 2016 and beyond; 10 per cent expect that could happen as early as 2015.
Indeed, China was the biggest spender on US real estate in the year to March 2014, according to the NAR, with the country investing $22 billion in American propety with an average sale cost of $590,826.
Abu Dhabi Investment Authority, and Chairman, AFIRE, comments: ”With a stable and transparent market and an economy that appears to be steadily improving without the fits and starts experienced in other regions, the U.S. has become the first stop for foreign real estate investors. And with the continued creation of wealth in China, it is not surprising that they, along with other nationalities, are voting with their ‘dollars.’”
Despite the US dominance, though, with New York and San Francisco both in the top five international cities, two new cities entered the rankings: Tokyo and Madrid.
Last year Tokyo was in 15th place and Madrid ranked 13th. These cities replaced Houston and Los Angeles.
The shift marks a move towards Spanish real estate, which is becoming increasingly attractive. Indeed, the IMF has just declared property prices have bottomed out. For the second year in a row, Spain has also ranked as the second-best country for capital appreciation.
Spain and the US are now tied neck-and-neck on TheMoveChannel.com, with both countries accounting for 1 in 10 of all enquiries on the portal apiece.
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