New York Chinese property agent on Chinese investors

New York chinese property agent on why Chinese investors are flocking to New York property.  The main reasons are overvaluation of property prices in China/Hong Kong and buying in anticipation of children coming to the US for higher education.

The Ritz Carlton

Property and the Ritz Carlton.

This is the Ritz Carlton at Half Moon Bay.  Many years ago, we (wife, mom, cousins)  stayed at the next door Best Western .  Then wandered around and came to this property.  We did not know it was a Ritz Carlton.  The view was spectacular, facing the Pacific Ocean.

A few years later, I went for an interview with Visa which was around the Half Moon Bay area.  Then, drove all the way to Half Moon Bay just to visit the dramatic view again.  Up to that time, never stayed at a Ritz Carlton.

Selecting property agent in New York - 3 simple steps

After leaving the corporate world in 2006, I became a full time property investor in New York during which my partner and I viewed thousands of properties and interacted with a lot of property agents.  Back then, I seldom actually interviewed agents and would just look at properties with any agent as long as the listings they sent me looked OK.

Through experience, I learned that there is a process in selecting a property agents similar to the process of interviewing an employee or financial adviser.  Spending time to properly interview agents and selecting the best fit will save a lot of time, money and ensure a productive experience.

Most people view an agent as a mere salesperson who just needs to send some listings and open doors to properties.  Most don't give much credibility to agents because the thought is that anyone can become a property agent.  That's true in 90% of agent/client interactions.  That's also the reason why most clients don't have a good experience with their agent.

Manhattan, New York property price to rent ratio

Manhattan property price to rent ratio from Manhattan's analysis guru/blogger Jonathan Miller of MillerSamuel.  A price to rent ratio is median price divided by median rental price and this shows how many years' annual rent it takes to buy property at a certain point in time.  The chart shows that the historical price to rent ratio in Manhattan, New York is 16x.  In 3Q'11 it was 25x.



If trends always revert to the mean (go back to normal levels), the current price to rent ratio would have to go down to closer to 16X.  This means either

US 30-year mortgage loan rate below 4%, New York transactions up

US mortgage loan rate on the 30-year fixed mortgage fell to 3.99% last week according to Freddie Mac.  This is the second time in history it fell to below 4%. 

The 30 year fixed mortgage is unique to the US where the mortgage interest rate is fixed for 30 years.  For the mortgage borrower, this is great because the carrying cost of financing a property here in the US is fixed.  While over time, the property price and rental income increases.  In most other countries, the mortgage loan rate is variable, which means it fluctuates with the overall interest rate environment. 

Sunday property preview

Previewed 5 properties for client with partner Susan today.  In between, saw a piano player performing at Washing Square Park and had coffee at this very cool shop, La Colombe where there is no coffee menu.  Just hot or cold coffee. 

Visit us at Castle Avenue Partners

New York property tax discount in new buildings

Property buyers in Manhattan, New York has always discussed the issue of buying in a new building which usually comes with a 421A tax abatement.  The tax abatement basically means for the first 10 years, the new property owner will pay a discounted tax amount.  The tax amount usually increases over 10 years to the full tax amount.

For example, if the full tax amount is $1000 per month, the owner of a new building may pay $100 per month the first two years, $200 per month the next two years etc.

Reasons for investing in New York property

New York is now the #1 ranked destination for global property investment.  Currently Chinese investors are a driver but depending on time period, New York has always had strong demand from foreign property investors.  As a broker interacting with foreign investors on a weekly basis, here are key reasons as to why wealthy individuals globally are investing in New York.

Chinese investors buying New York property

Chinese investors have been aggressively buying up Manhattan New York property in the past year.  I have been interviewed by CNN (Foreigners scoop up U.S. homes), New York Times (China's Wealthy Buying Condo Apartments) and Bloomberg on the topic and thought I'd do a summary of the trend in this blog post.


Overall, there is fear of a double dip in the US economy and the fear is reinforced by current news about the European debt crisis.  China's property market is beginning to slow and it seems there are few safe havens for investment.  Manhattan, New York property may be one of these few safe havens.  Chinese investors observed New York's price stability from the prior recession and view now as a time to enter the New York market while prices are recovering.

New York up 9.3% in Knight Frank's 3Q'11 Global Market Report

Knight Frank's 3Q'11 global prime properties report:



Summary points from Knight Frank's 3Q'11 global prime properties report:
1. Prime properties price growth slowing for the first time since the recession of 2008/2009.  On average, prime property price increased 4.3% in Sept 2011 compared to a year ago.  The cooling down is partly due to government deflationary measures in Asian cities.

2. New York prices up 9.3% during the same period, outperforming the global average.