The Real Deal October 1 2012
October 1, 2012 http://therealdeal.com/issues_articles/new-yorkers-go-old-world/
New Yorkers go Old World By Tom Acitelli
The euro may be muddling its way through an existential crisis, but there’s still real estate to be had across the continent — and buyers, including New Yorkers, looking to plunk down all cash for it. This month, The Real Deal talked to brokers and analysts to find out where New Yorkers are buying in Europe, given the euro crisis’s effects on global trade and investment as well as the recent political tumult, and to see how the various submarkets are holding up. The focus is not on the villa- and chateau-dotted regions of Italy’s Tuscany and France’s Riviera, where wealthy New Yorkers bought during the Cold War era. Those regions, brokers say, are dominated now by buyers from newly emboldened economies, especially Russia and China.
Instead, New Yorkers are buying (or looking to buy) property in old urban stalwarts like London, Rome and Paris, and in less discovered places like Dubrovnik, Croatia, and perhaps even the tiny country of Montenegro on the Adriatic Sea. Americans overall make up slim percentages of the buyers in these markets. In central London, for instance, 3.7 percent of buyers July 2011 through July 2012 were American, while in Italy, 6 percent of buyers in 2011 were American, according to London-based brokerage Knight Frank. Many of these American buyers, though, hail from New York. What’s more, brokers and analysts say interest has increased from Gotham addresses. In fact, the one financial constant on a continent in economic flux may be the sophistication of the New York homebuyer. “Unlike the buyers coming into New York, who ask questions because they’re not familiar with the market, any [New York] buyer we’re seeing who’s buying in places like this actually knows the market fairly well,” said Neal Sroka, a Prudential Douglas Elliman broker and president of DE Worldwide, a global real estate sales consultancy based on Madison Avenue. “Somebody who decides to buy an apartment in Paris, I would venture to say, has been visiting Paris for 30 years or has business there,” he added. Below is a rundown of some of the European destinations in New Yorkers’ crosshairs — and how they’re holding up. Paris
While New Yorkers don’t seem to be buying more in Athens yet, the current real estate conditions are ripe for picking up apartments.
New Yorkers will always have Paris: Market observers say they continue to buy homes in the French capital, even as the country’s new president toys with significant tax increases. “Everybody wants a piece of Paris,” said Alon Kasha, who eight years ago relocated to the French capital from New York with his wife and launched A+B Kasha, a firm specializing in selling and renovating pieds-à-terre for foreigners. The economic uncertainty following the May election of Socialist Party President François Hollande has not impacted the real estate market in Paris, Kasha argued. Nor has the euro crisis dissuaded New Yorkers from apartment-hunting there, other sources say. In fact, after dropping during the recession, prices for prime apartments in central Paris’s most desirable neighborhoods climbed steadily. In 2011, they were up nearly 15 percent annually, to roughly $1,070 a square foot, according to the Global Property Guide, a U.K.-based website that tracks real estate worldwide. (All reported dollar amounts were converted from euros based on last month’s rate of $1 to €1.22.) Such increases are similar to those seen in Paris during the last decade’s real estate boom, inviting fears of a housing bubble in France. However, Knight Frank has said the city’s prime areas will “continue to stabilize” and has reported that prices have essentially been flat in 2012. Further muddying matters, Hollande has famously proposed a top individual income tax rate of 75 percent, which some say could trigger an exodus of French les riches, upping the city’s luxury inventory as wealthy property owners vacate to beat the taxman. Sellers in Paris do face high transfer taxes. But according to brokers, that is not likely to stop New Yorkers from buying there. “As far as Americans buying apartments in Paris,” Kasha said, “they are not doing it as an investment decision. What they are buying is the lifestyle.” Elizabeth Stribling, the veteran New York broker who also does business in Paris, echoed this assessment of the typical higher-end New York buyer. “Those New Yorkers who contact me about Parisian property are generally in a pied-à-terrebuying mindset,” she said. “They know they are going to spend along the lines of a New York pied-à-terre.” Stribling rattled off parts of central Paris where she said most of the buyers have been foreigners, including Americans: the two islands in the Seine, Saint-Louis and Cité; the 7th Arrondissement; and the 4th Arrondissement, where she herself has a flat. And whereas New Yorkers would have paid around $650,000 for a one-bedroom during the boom, according to Kasha, they will now pay into seven figures for two- to four-bedroom apartments.
New Yorkers go Old World By Tom Acitelli
The euro may be muddling its way through an existential crisis, but there’s still real estate to be had across the continent — and buyers, including New Yorkers, looking to plunk down all cash for it. This month, The Real Deal talked to brokers and analysts to find out where New Yorkers are buying in Europe, given the euro crisis’s effects on global trade and investment as well as the recent political tumult, and to see how the various submarkets are holding up. The focus is not on the villa- and chateau-dotted regions of Italy’s Tuscany and France’s Riviera, where wealthy New Yorkers bought during the Cold War era. Those regions, brokers say, are dominated now by buyers from newly emboldened economies, especially Russia and China.
Instead, New Yorkers are buying (or looking to buy) property in old urban stalwarts like London, Rome and Paris, and in less discovered places like Dubrovnik, Croatia, and perhaps even the tiny country of Montenegro on the Adriatic Sea. Americans overall make up slim percentages of the buyers in these markets. In central London, for instance, 3.7 percent of buyers July 2011 through July 2012 were American, while in Italy, 6 percent of buyers in 2011 were American, according to London-based brokerage Knight Frank. Many of these American buyers, though, hail from New York. What’s more, brokers and analysts say interest has increased from Gotham addresses. In fact, the one financial constant on a continent in economic flux may be the sophistication of the New York homebuyer. “Unlike the buyers coming into New York, who ask questions because they’re not familiar with the market, any [New York] buyer we’re seeing who’s buying in places like this actually knows the market fairly well,” said Neal Sroka, a Prudential Douglas Elliman broker and president of DE Worldwide, a global real estate sales consultancy based on Madison Avenue. “Somebody who decides to buy an apartment in Paris, I would venture to say, has been visiting Paris for 30 years or has business there,” he added. Below is a rundown of some of the European destinations in New Yorkers’ crosshairs — and how they’re holding up. Paris
While New Yorkers don’t seem to be buying more in Athens yet, the current real estate conditions are ripe for picking up apartments.
New Yorkers will always have Paris: Market observers say they continue to buy homes in the French capital, even as the country’s new president toys with significant tax increases. “Everybody wants a piece of Paris,” said Alon Kasha, who eight years ago relocated to the French capital from New York with his wife and launched A+B Kasha, a firm specializing in selling and renovating pieds-à-terre for foreigners. The economic uncertainty following the May election of Socialist Party President François Hollande has not impacted the real estate market in Paris, Kasha argued. Nor has the euro crisis dissuaded New Yorkers from apartment-hunting there, other sources say. In fact, after dropping during the recession, prices for prime apartments in central Paris’s most desirable neighborhoods climbed steadily. In 2011, they were up nearly 15 percent annually, to roughly $1,070 a square foot, according to the Global Property Guide, a U.K.-based website that tracks real estate worldwide. (All reported dollar amounts were converted from euros based on last month’s rate of $1 to €1.22.) Such increases are similar to those seen in Paris during the last decade’s real estate boom, inviting fears of a housing bubble in France. However, Knight Frank has said the city’s prime areas will “continue to stabilize” and has reported that prices have essentially been flat in 2012. Further muddying matters, Hollande has famously proposed a top individual income tax rate of 75 percent, which some say could trigger an exodus of French les riches, upping the city’s luxury inventory as wealthy property owners vacate to beat the taxman. Sellers in Paris do face high transfer taxes. But according to brokers, that is not likely to stop New Yorkers from buying there. “As far as Americans buying apartments in Paris,” Kasha said, “they are not doing it as an investment decision. What they are buying is the lifestyle.” Elizabeth Stribling, the veteran New York broker who also does business in Paris, echoed this assessment of the typical higher-end New York buyer. “Those New Yorkers who contact me about Parisian property are generally in a pied-à-terrebuying mindset,” she said. “They know they are going to spend along the lines of a New York pied-à-terre.” Stribling rattled off parts of central Paris where she said most of the buyers have been foreigners, including Americans: the two islands in the Seine, Saint-Louis and Cité; the 7th Arrondissement; and the 4th Arrondissement, where she herself has a flat. And whereas New Yorkers would have paid around $650,000 for a one-bedroom during the boom, according to Kasha, they will now pay into seven figures for two- to four-bedroom apartments.
