Step away from the condo. Looks like New York City's ultraluxury property boom – marked by $100m price tags – is at an end. The New York Times this week reported that a four-year construction boom aimed at buyers willing to spend $10 million or more has flooded the top end of the market just as global market turmoil has caused wealthy investors to falter and the US government is putting all-cash transactions under scrutiny.
Global factors influencing the pull back on superluxury pads include China’s tightened restrictions on capital outflows, uncertainty surrounding Brexit, lower oil prices curbing wealth in the Middle East, and tax increases driving up property transaction costs in some countries.
At 432 Park Ave, the tallest residential tower in the Western Hemisphere, full-floor apartments originally listed for $78 million to $85 million have been split in two and priced at approximately $40 million each. In and around West 57th Street, known as Billionaires’ Row, “it’s not just slow – it’s come to a complete halt,” said Dolly Lenz, a broker to the superrich, blaming oversupply, little differentiation among glassy ultraluxury units and peak pricing.
New York is not alone. After the global financial crisis hit in 2008, investors turned to high-end real estate around the world as a safe place to park their millions. But since the middle of 2014, prime property values have dropped in Paris, Singapore, London, Moscow and Dubai. Soon lesser mortals may be able to consider cosmopolitan living again.
