Average Manhattan apartment costs $2m, and developers are to blame

Woody Allen and Diane Keaton in Manhattan - 1979

If you have always wanted to buy your own place in the Big Apple, you’d better do some intense saving. The average price of a Manhattan apartment has hit a record $2m (£1.4m), according to an analysis of recent sales published on Friday.

The median sale price of Manhattan homes in the first three months of 2016 was $2.05m – an increase of 18.4% compared with the first quarter of 2015, according to a report by real estate experts Miller Samuel and real estate agent Douglas Elliman.

The surge in the average price was caused by a string of new super-luxury developments including 220 Central Park South and 432 Park Avenue, the Rafael Viñoly tower on “Billionaire’s Row” near Central Park that at 1,396ft is the tallest residential tower in the western hemisphere.

An apartment on the tower’s 65th floor sold for $26.6m last month. There are still several 432 Park Avenue apartments left to buy, including a 8,055ft five-bedroom 88th floor penthouse on the market for $76.5m (and additional monthly service fees of $15,542).

Jonathan Miller, who has been compiling Manhattan property sales report for more than 20 years, said he had never seen such a construction boom at the high end of the market and it is “really skewing the average price higher across the whole market”.

“These new towers are a new category of luxury. It’s not luxury, it is super-luxury,” he said. “There are so many new large buildings, it’s not like any other development boom. The buildings are twice as tall as the last [construction] cycle and have incredible views. They attract a new global market of the super rich.”

Miller said about 50% of the apartments in the new super-luxury towers are being sold to foreign buyers, mostly from China, Europe and Brazil. He said the world’s wealthy aren’t buying them as properties to live in, but more as “safety deposit boxes” to protect their fortunes from global financial turmoil.

Other big sales in Manhattan last month, included a triplex penthouse on the Upper East Side for $31m, and $28m for an apartment in Greenwich village.

Manhattan’s price per square foot also hit a record high of $1,713, an increase of 35.6% on the same period last year. At that price a standard 6ft-by-8ft prison cell would cost $82,000.

Of the 2,877 apartment sales between January and March, 46% were paid for in cash. It comes as the US Treasury launches a crackdown on cash sales to unidentified owners, which the government said corrupt foreign officials and international criminal masterminds have used to disguise their ownership and wash “dirty money”.

For a trial period, starting last month, the Treasury will require the identity of the “natural persons” behind shell companies used to pay cash for properties worth at least $3m (£2m) in Manhattan and $1m in Miami-Dade County, the nation’s second-biggest centre of overseas investment in property.

“We are seeking to understand the risk that corrupt foreign officials, or transnational criminals, may be using premium US real estate to secretly invest millions in dirty money,” said Jennifer Shasky Calvery, director of the Financial Crimes Enforcement Network (FinCEN), a branch of the Treasury.

New York isn’t the most expensive real estate market in the world, that honour goes to Monaco according to a recent report by real estate firms Knight Frank and Douglas Elliman that looked at what $1m can buy around the world.

A million dollars will buy 17 square meters, or 183 square feet in the principality of Monaco. The same money in Hong Kong buys 20 square meters, or 215 square feet. London ranked third with 22 square meters, or 236 square feet.

New York was the most expensive US city with $1m buying 27 square meters, or roughly 290 square feet.

Powered by Guardian.co.ukThis article was written by Rupert Neate in New York, for theguardian.com on Friday 1st April 2016 18.08 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010


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