The lower Canadian dollar and strong economic fundamentals in many Canadian provinces, are outweighing the fallout from soft resource markets leading to positive growth across the country.
Indian buyers spent $7.9 billion on U.S. real estate during the 12 months ended March 2015, up from $5.8 billion a year prior. Buyers from India and Singapore – countries with a growing middle class – see New York as a solid investment opportunity. New York “makes sense” for Indian investors who speak English but are priced out of the overheated London market, where they may not find properties between $1 million and $3 million.
Few real estate markets in the United States have enjoyed a sharper rise the past few years than Manhattan, where the average price of a home stands at a record $2 million, according to Douglas Elliman Real Estate. But despite a few record-shattering purchases, New York’s priciest borough is in the throes of a softening at the very high end as a glut of expensive condominiums floods the market and demand for top-tier properties tapers off. Despite a softening at the top, the broader market in Manhattan is still showing strength as home values continue to rise and inventory remains tight. While construction is ballooning for luxury apartments, there are much fewer listings for more moderately priced homes.
Securitization markets may be telling us that underwriting has gotten too loose. In February, we saw spreads on top rated bonds widen 30 basis points compared to late last year. Spreads on BBB paper widened as much as 250 basis points during the same time frame. New issuance volume is off significantly as CMBS conduits recognize the investor push back and are waiting for calmer sailing. As CMBS conduit lenders go to market to secure financing, they are having trouble finding investors across the entire capital stack, creating holes, where at times in the past quarter they have not been able to place all of the mezz securities.
Many commercial real estate executives see solid prospects for their sector, with 52% indicating that they believe that their segment of the market is either strong or very strong, and 71% say adequate capital is available for investment. Commercial real estate executives appear relatively optimistic about the general state of the market in 2016, with many predicting higher than average deal volumes for their firms. Further, when considering the adoption of new technology, most believe that the influx of commercial real estate tech companies is revolutionizing the industry.
Commercial and residential development in Downtown Miami and its periphery is altering the city’s skyline. In providing options for those less affluent than the condo dwellers by the water, it is challenging the long-held perception that Miami is not a place where a middle-class person can live well and raise a family.
The buzz about the pending tanking of the upper reaches of Manhattan’s luxury condo market has reached a fever pitch in recent weeks, with news like the Chetrit Group’s exit from its planned condo conversion at 550 Madison Ave and Extell’s reported $162M drop of its sellout at One 57.
Across the market, the numbers don’t necessarily support the idea that sales of high-end units in the city have slowed.