For the first time, the Chinese have become the biggest foreign buyers of apartments in Manhattan, real estate brokers estimate, taking the mantle from the Russians — whose activity has dropped off since the unrest in Ukraine and the imposition of sanctions by the United States.
This comes as wealthy Chinese are pouring money into real estate in New York and some other major cities around the world, including London and Sydney, as they seek safe havens for their cash and also establish a base for their children to get an education in the West.
After the U.S. housing bust in 2007-2010, home prices fell to levels that made them appealingly low by comparison with many other parts of the world. Chinese buyers are switching from markets like Shanghai, Hong Kong and Singapore amid fears that prices have soared to frothy levels. Luxury apartments cost between $4,100 and $5,000 per square foot in Hong Kong, while in Manhattan they cost half that, ranging from about $2,100 to $2,500. London is also cheaper, at $3,300 to $4,100 per square foot.
The brokers say that many Chinese buyers are also investing abroad so they can own property near major educational institutions. Some are buying homes near top colleges — even though their children are so little they can’t walk yet. More than 80 percent of wealthy Chinese want to send their children overseas to school, according to the Hurun Report, a Shanghai publication.
“They’re looking for trophy properties,” said Broker Shawn Elliott. “They’re looking for their children to be comfortable, and to be near Columbia or New York University.”
In Manhattan, some locals are also starting to grumble, brokers say, about the new “China Price,” a phenomenon that can see Chinese buyers sweep in and outbid other buyers, often with all-cash offers.
In Manhattan, it wasn’t long ago that Russian oligarchs dominated the gilded world of real estate, gobbling up status-heavy marquee properties, such as an $88 million Robert A.M. Stern-designed penthouse and a $75 million mansion with a ballroom and a rooftop aerie.
Now, brokers say, Russian buyers have become scarce largely because of fears that the struggle over Ukraine will worsen leading to increasingly tough U.S. sanctions on politically-connected and wealthy Russians.
“They’re gone, they’re gone,” said Sotheby’s International broker Nikki Field, “They’ve been gone since the Crimean outbreak.”