28 March 2011

The large amount of capital available and diminishing supply levels makes New York a very attractive market.

We recently did a ‘cost-of-housing’ measure to compare property prices and the rebound from the recession between London, New York, Moscow and Hong Kong. It was really interesting to see the correlation between these countries and the speed with which Hong Kong, as a barometer of Asia, has bounced back. Having peaked and then troughed in mid 2008, Hong Kong has come back with a vengeance over the last 12 months. In comparison, London, a market we at IP Global are very fond of, came off in mid 2007 and started to rebound slowly in late 2008. Contrast that with Moscow that dived earlier and returned to some strength in late 2009, the New York property market just looks like the best value. It is still coming out cheaper on average for a city centre apartment than London, Hong Kong or Moscow. Interestingly the supply levels in New York are tightening with no new developments built in the last 2 years. The large amount of capital available and diminishing supply levels makes New York a very attractive market. That’s why we have been bullish on New York for a good six months now. The economy and property market have reacted positively to the economic stimulus programs and there has been substantial recovery during 2010 and already an increase in the volume of purchases in New York and New Jersey.

Jersey City, located across the Hudson River from Manhattan, is also an interesting proposition because it’s an alternative play on New York with a lot less money required to invest. Many of our clients want to back the US as a housing market, particularly the major commercial capitals, but they are nervous of spending USD 700,000 or USD 1 million in New York. Consequently if they get into somewhere like Jersey City, which is a stone’s throw from Manhattan’s city centre, they are in for a lot less money allowing them to gain a foothold in a market they previously could not afford to invest in. You’re talking about property prices of mid USD 300,000 for a one bed apartment in a new build with incredible amenities. One such development is The Saffron, which is situated just 7 minutes from the World Trade Centre. In New York this type of development would be selling for north of USD 1 million and the commute from The Saffron is quicker to the World Trade Centre than from Central Park. The yields are also better than New York, up to 7%, and it’s a good play on a currently undervalued market without having to worry about investing a large amount of capital.

New York and Jersey City both present strong cases for investment achieving different investment objectives. Jersey City appeals to investors seeking a high yielding investment and who would like to gain a foothold in the New York Greater Metropolitan Area. Whilst New York is a capital investment play attracting investors who would like to capitalise on the rebound of the New York property market. It is important that you seek expert help before embarking on any investment. Please contact one of IP Global’s expert Sales Consultants at 39659300 for more information.

To find out more about investing in New York visit www.ipglobal-ltd.com or email IP Global at info@ipglobal-ltd.com.

Kind Regards

Tim Murphy
Founder and CEO of IP Global

IP Global

Written by IP Global

IP Global’s full-service approach is built on extensive market research and analysis combined with a significant financial commitment to every investment we offer. We are able to manage the entire investment process end-to-end, from sourcing, financing, and management to those all important exit strategies, making investment in real estate as straightforward as investing in more traditional asset classes. Our expertise, experience and strong record have produced over USD2.8 billion in international real estate investments in over 30 markets worldwide.

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