Image: Declan Hanlon

Manhattan’s Luxury Addresses Poised for Growth in 2021

Although overall sales volume and prices were sluggish in 2020, it didn’t stop a penthouse on the top two floors of 220 Central Park South closing for US$99.9 million (roughly A$130.1 million) in July 2020, becoming the year’s most expensive property in New York City.

A look inside the luxurious 220 Central Park South. Image: 6sqft

While some of the properties along the prestigious Billionaires’ Row in Manhattan might have lost a bit of value in 2020, the promise of a successful vaccination program, reopening of the economy and with the election in the rear-view window, prices might be on their way up.

“America’s post-lockdown boom looks to have started with economic indicators from employment to household spending now on an upward curve,” Knight Frank Kate Everett-Allen Head of International Residential Research said.

“Sales are strengthening, prime tenants are eyeing city centre stock and both inventory levels and ‘days on the market’ indicators are shrinking. The question is will New York’s prime price growth move into positive territory in 2021 for the first time since Q1 2018? In our prime forecast, we envisaged zero per cent growth in 2021 but this could yet prove conservative.”

Billionaires’ Row in New York City

Knight Frank define the prime market as typically encompassing the top five per cent of properties in any given market.

Knight Frank just released their New York Focus 2021 report, in which they assess the importance of New York to the world’s wealthy and how the prime market is performing.

New York attracts high net worth individuals

According to Knight Frank, there are now 180,006 ultra-high-net-worth individuals (UHNWIs) in the United States, accounting for 35 per cent of the global total.

New York is home to more of them than any city worldwide, with 7743 UHNWIs calling it home.

New York is equal with London in places where these ultra-rich people want to live, and New York has the properties to match their extravagant wealth.

The aforementioned penthouse isn’t even the priciest residence in New York City, but you don’t have to go too far to find the dearest, however.

That title is held by hedge fund manager Kenneth Griffin who purchased four floors in the same apartment building in 2019 for the pretty sum of US$240 million (A$312.6 million).

Second place goes to a duplex penthouse at the top of One57 at 157 West 57th Street, which was purchased by Michael Dell for just over US$100 million (A$130.2 million) in 2015.

The US$100m (A$130.2 m) duplex has six bedrooms and occupies 11,000 square feet of space. Image: Business Insider

Prices expected to stabilise in Manhattan

Sales activity began to pick up in December 2020, and by February 2021, the number of signed contracts for Manhattan condos had increased by 55 per cent year over year, according to Knight Frank.

First-time buyers increased their market share, accounting for 42 per cent of all Manhattan sales in December 2020, a seven-year high, as low-cost financing and falling prices pushed some tenants to buy.

Listing inventories and days on the market indicators have drifted lower since their peak in August 2020, indicating a degree of equilibrium is emerging.

In February 2021, there were 496 new condo listings added to the market, down 31 per cent from 717 a year ago. Along with the increase in revenue, homeowners’ inability to open their doors to viewings during the pandemic may have also played a role.

Prime Manhattan prices have been softening for the past three years, but record low interest rates, a reassessment of housing requirements, and the possible reversal of the 2017 State and Local Tax (SALT) deduction could spur demand from outside the state.

In 2021, Knight Frank expect annual prime price growth to level off.

Surprisingly, despite extensive travel restrictions, overseas buyers represented 15 per cent of all New York sales in 2020, according got MillerSamuel, showing a degree of resilience in the market with the number likely to increase this year.

Motivated renters

Renters are enjoying the current state of the market however, as Manhattan’s median rents fell to $3,595 per square foot in January 2021, the lowest amount in a decade and down from $3,595 a year ago.

Renters were inspired by these discounts, as well as the possibility of a faster commute after the pandemic, with new lease signings having recovered to their peak level following the global financial crisis by the end of 2020.

Away from the city, Jule Pond Drive in Southampton, New York went for an eye-watering US$145 million. Image: NY Post

Join The Rich List

Receive the beautifully curated selection of what's trending in luxury with inside stories and tips from our experts

You may also like

Pin It on Pinterest

Share This