LET’S TALK LUXURY APARTMENTS
New York City real estate prices, like London’s, hover at the absurd. I find it interesting that wealthy foreign buyers do not have a problem with parking vast sums of money for a New York City condo. At One57, currently the tallest residential building in the city, buyers are routinely paying $8000PSF U.S. (Yes, eight thousand dollars per square foot). Many buyers are just looking for a safe place to park cash. $32.5M, $54M, $70M, $88M, and $90M are all recent condominium transactions at well over $8000PSF.
“Uber wealthy people chasing real estate,” one real estate broker is quoted as saying. This, of course, is occurring while the U.S. staggers out of their real estate mess. “Many wealthy people want to preserve their capital outside of the country they earned it in,” a prominent real estate lawyer is quoted as saying. It only makes sense that millionaires and billionaires from South Asia, China, India, Pakistan, the Middle East, and Africa want to make sure some of their fortunes cannot be lost.
I find it interesting that we local Torontonians wince at the idea that offshore investors would buy a one bedroom downtown for $300,000 in order to invest in a safe haven. The proposed “unsustainability” of our local quality condo projects selling at $600PSF, and our uber-quality 5-star projects inching towards $900-$1000PSF, is of course nothing short of absurd. If one really wants safety with their wealth, Toronto at $600PSF is a far safer bet than New York City at $8000PSF. We really need to get with the program. Despite what we may think, the world determines property values today, not Jim Flaherty or Mark Carney. Certainly, our illustrious bank economists, who couldn’t hit an economic projection accurately if it happened a week ago, are not worthy of weighing in. Unless of course, you want wrong advice.
Mark my words. Real estate is more scarce than water or food and all of these items are precious. Every one of them will rise in value astronomically in our lifetimes. Toronto real estate may seem expensive to you standing on the sidelines, but it isn’t to those who are in the game.