New York’s luxury property market is gearing up for a pivotal 2023, with the most exclusive enclaves of the city witnessing a significant uptick in property viewings. Ultra-rich Gulf investors are reportedly snapping up properties in New York, according to Middle East Eye.
NYC Luxury Property Market Is Expanding
Wealthy GCC (Gulf Cooperation Council) investors are vying for luxury properties, with New York and London the standout cities in high demand for prime and super-prime sales.
However, over the last few years, the worldwide border restriction due to COVID-19 caused a slowdown in the US property market.
Case in point: International buyers invested $59bn on US residences in the last 12 months ended March 31, 2023, which is the second-lowest home sale since 2009, according to the National Association of Realtors.
On top of that, the hefty hikes in interest and mortgage rates, soaring inflation, and a high risk of the recession induced as the after-effect of the Russian invasion of Ukraine further exacerbated the crisis.
However, with easing border restrictions and the country trying to eke out growth, the USA’s luxury property market is poised for a tremendous comeback.
For example, the upscale property market of Manhattan is reportedly on firm ground. The borough alone witnessed a 35.6% increase in luxury residence transactions through last August compared to the same period in 2021 and from the pre-pandemic levels of 2019.
Overall, the city racked up around 244 home sales valued at $10M or more—higher than any other city in the world.
It means: despite soaring economic headwinds and geopolitical uncertainties worldwide, the luxury market in New York City remains robust.
The Economies of Gulf Nations Are Booming
Even though the soaring energy prices stemming from the Ukraine conflict have caused higher monetary conditions and rising global inflation, it has buoyed the economies of the Gulf nations.
Inflated oil prices have bolstered GDP growth prospects in Saudi Arabia. The country reported real GDP growth of an eye-watering 8.7% in 2022, the highest among the G-20 countries.
UAE is also radiating optimism, chalking up economic growth of 7.6% in 2022. As a result, Gulf nationals have had their wealth increase.
Again, Dubai has been ranked as the world’s fourth most active luxury residential market last year, with property prices rising roughly 44%.
On the other hand, Riyadh ranked third, with prices surging around 25%.
Again, international investors are splurging money into the Gulf stock market.
UAE’s ADX and Saudi’s Tadawul have been ranked as the best-performing stock markets in the world, while the Initial Public Offering (IPO) in a stock market seems to be paralysed elsewhere.
GCC residents usually have high exposure to the equities of their countries.
Retail investors’ share of total equities trading volume on Tadawul is now around 67%, whereas, for US markets, it’s only 25%. Gulf stocks may seem down this year, but historically, it’s still high.
Gulf Nationals Looking at NYC Properties with Fresh Interest
The strength of the US dollar compared to the Pound Sterling has been underscored as a key player in buoying NYC’s luxury property market.
The US dollar has long been considered a safe-haven asset during political tensions, prompting investors to devise active strategies based on geopolitical shocks.
Ultra-rich GCC nationals already invested in Europe are now turning to the US luxury market as a long-term investment and as part of their effort to maximise their portfolio.
One leading benefit they enjoy over other foreign investors is that the currencies of the Gulf nations are pegged to the US dollar.
That said, with a massive influx of Gulf nationals preferring contemporary-style interior architecture for their luxury NYC homes, the demand for high-end interior design services like Accouter is ballooning.
By blurring the line between interior design and architecture, a class-leading interior service company can transform exclusive spaces into exquisite homes.
With a substantial number of Gulf nationals flocking to the city, NYC’s luxury property market is poised to grow this year.