Asians Purchase Half of New London Homes

bullish!

Funny how the drumbeat here is for the retail investor to follow investable China plays like Yum Brands (which incidentally can't seem to unload it's unpopular KFC franchises in the US fast enough) but is showing tremendous growth overseas. Meanwhile, if the wealthy Chinese can get ther
Ir money out, lots of it goes to hard assets in Canada, US, Australia. What am I missing?

Heehee... When I first saw your post title I thought it was referring to New London, CT and it made me go hmmm...

I'm suprised to see see Londoners so relaxed as to sell half their house and living with asians.

Bulgoogi and crumpets for all!

I love Asian investors, they're the best. Especially the ones with an eye for nice properties.

Take this one. Sure, it's only an 1100 sq ft 2BR. But, it's on the 19th floor overlooking the park with a spectacular 1200 sq ft terrace. This time of year, that view is particularly nice -- a crisp blanket of green, crystal-clear visibility, hawks soaring past you at eye-level. Offered for $4M with monthlies of $4500, this investor picked it in 2010 at $3.5M -- decently-priced at ~$2K a sq ft if you count the outdoor space at 50%:

http://streeteasy.com/nyc/sale/471095-condo-160-central-park-south-central-park-south-new-york

Then, said investor put in on the market for rent. Eventually, it got picked up for $8000 a month:

http://streeteasy.com/nyc/rental/673645-condo-160-central-park-south-1200sqft-private-terrace-with-unparalleled-breathtaking-central-park-view-central-park-south-new-york

I mean, that's great. Who else is going to pick up a $3.5M tab, $350K in transaction costs, and a $4500 monthly nut, and then turn it over to you for $8000 a month?

inonada stop introducing buy vs sell into this thread. this is about asians worrying that their yen will be useless soon and want to stick their money into USD.

i said it before, once the euro goes back to where it belongs, closer to $1 USD = 1 Euro, the europeans are going to dump their properties on the market. even if they sell at 10-20% discount, they will still be making money.

Sorry, ab -- I had forgotten that the only way to have money in USD is to buy zero-yielding NYC RE.

Just like when they purchase condos in Hawaii in the 80s and golf courses in monerey at peak px's

Rockefeller Center

Need I say more?

fvck those asian gangsters

inonada: you didn't mention that that $8000 rent includes electric, cable, wifi and MAID service. That place is a dream rental. Maid service included!!!! All of a sudden my current rental which I used to love for its fiscal restraint is boring and conventional.

Apt23, what happened to your husband?

These guys are parking the money. They don't give a hoot if they lose 20,30,40k per year. For them that is the cost of keeping the money for the rainy days.

Property rights optionality... what is that worth?

If it's any consolation, apt23, that rent was quoted as only until January 1st. Then it could have gone up to *gasp* $9K, or dare I say, $10K. The horror, the horror.

>Then it could have gone up to *gasp* $9K, or dare I say, $10K. The horror, the horror.

You'd make an excellent novelist with that dramatic style of writing.

I remember when Hong Kong Chinese went through certain areas of Queens in the '90s with shopping bags full of cash. They would knock on the doors of every house on a street and offer to buy them right there and then. I was talking to someone yesterday who is a member of a family from Hong Kong. They're all getting together tomorrow to decide how to pool their money to buy properties in Nassau County.

>Then it could have gone up to *gasp* $9K, or dare I say, $10K. The horror, the horror.

only an idiot would spend 10k /month for a 1200 sq place. so as a renter there you are a lesser idiot.

Maybe that's why it had to drop to $8K.

So are all the geniuses are living in dark shoeboxes on the 2nd floor facing a wall with the sidewalk as their outdoor space?

Or maybe facing an avenue, maybe that's a sign of true intelligence?

outdoor? you paying for that? look at all those balconies all over the city used for storage.

The Asians and Latin Americans are provided liquidity needed to transact in our RE markets -- I recently sold my apartment because my Asian buyer was able to make a decision very quickly and it was an all cash transaction. To be honest I was really thankful, since I didn't have to worry about the buyer's loan application falling through if he had to take a mortgage.

So, more power to them -- and anything to help our housing market recover!

not too many Chinese TO's in Nassau Country, so could be good if you like Chinese food..

>So, more power to them -- and anything to help our housing market recover!

Why exactly do we need the housing "market" to recover?

we dont need any "recover" because the RE price is still at bubble level

ionada, Great find! you forgot the buyer's previous ambitions:

> Previously Listed by Jumeirah Essex House at $20,000.

Although, nowhere near providing a decent yield, so basically this investment can only deliver on the "bragging" department, producing some social status type of returns.

if it were about the chinese protecting themselves with the USD, they wouldn't be opting for a declining asset with high transaction costs. there are better options for storage of value. imho it's more emotional than that, they got spoiled with their own RE bubble, maybe made a ton of $ on it and want to brag about having played the USA RE bubble well too. after years of RE speculation, these guys just cannot consider other asset classes, their minds get stuck in the RE obsession.

now, this is an awesome thing for us in NYC and London, these wealthy people pay a truck load of property taxes & use almost no services in exchange for the benefit of bragging that they have property here to their local acquaintances. not too shabby of a deal for us.

Agreed, notadmin. We all win through the route of taxes. Those of us who live in places with absentee neighbors get a nice subsidy for common charges. And those of us who rent from these investors get an even nicer subsidy in the form of a free apt.

This guy bought mid-2010 for $3.5M. Assuming rent averaged $9000 a month (despite the $8000 ask), he's netted $60K on monthlies so far, ignoring transaction costs. Meanwhile, if he had put the $3.5M in the market on either his contract or sell date, he'd have been up $1.2M. It'd take a $5.1M sales price to get to the same point today: $5.1M sale price, minus $500K transaction costs, minus $3.5M purchase price, plus $60K net after rent.

On the $20K rent, yeah that was a good one. I think at a $20K rent, this place would make a compelling purchase at $3.5M. But $240K a year for that? Yeah, right. It's as if they bought the place at a "great price" based on some dumb bubble notions, then they decided that in order for it to make sense they'd need a $20K rent. But they forgot to ask the question of who exactly would pay that kind of rent for that place.

Think about it. Say you're making $1M a year. Pretty good money, even by Manhattan standards where it'd put you in the top 1% -- which starts at $790K and includes only about 7500 households. Leaves you $600K after-tax. But you then blow 40% of it for that apt.

Uh-huh, I see big rent increases coming. Because it said so in the NY Times RE section.

The folks at this income level are from "tainted" money (bribery, corruption at *some* point). This is all about protecting their money from the Chinese government (in case they need to flee) and nothing else

>The folks at this income level are from "tainted" money

But that doesn't count, only negative aberrations count according to apt23, inododo, and ape67street.

London has always had more ex-pats than Manhattan, but we are as close as it gets to this type of market in the US.

The Asian/Russian/Emerging-Market buyers in London/NYC are essentially the equivalent of the drug dealer money that bought in Miami in the 1980s on.

They aren't "diversifying" their investments but taking dirty money out of their home countries at any-cost.

Letting them buy and eventually move to the West is opening us up to a whole wave of future "Emg Mkt Madoffs" that will probably try to scam/steal/rip-off their way in their new "safe house" countries, just as they did back where they came from - for better or worse, I predict they prey on their own immigrant communities that will probably admire them for their "success".

memito, i call your condition xenophobia. google it and start dealing with the problem.

I have worked in international finance and trading for over a decade... have lived abroad for years... speak several languages...

Hardly xenophobic, just tried of people denying/overlooking fraud, corruption and theft just because it supports asset/RE prices. (And this isn't limited to international buyers, but domestic ones as well that have scammed the system.)

If you think that the majority of foreign money buying these multimillion dollar apartments is clean as a whistle, you are kidding yourself. Many of these buyers are doing so sight-unseen - not exactly a business-savvy move - but who cares: If you made your money ripping off the system in a corrupt or illegal fashion you just want to get it out of the country before things unravel.

Meanwhile, isn't it ironic that the WalMart/Mexico bribe/corruption news broke this weekend?
Bo Xilia ousted from the "Communist" Party a couple of weeks ago and charged with "corruption" - essentially he was allowed to steal money until he pissed off higher-ups.

BOTH ARE JUST THE SNOWFLAKE ON AN ICEBERG OF CORRUPTION.

Ultimately, you have to ask yourself "what incentives do many emerging market business elite have to keep their operations 'clean'"?

The answer is: NONE.

Just go to China/Brazil/India/Russia and try to run a business without paying people off - and not being politically connected. The concentration of wealth involved in local, provincial/state, and federal politics is outrageous in all of these countries (and in the US as well). The richest 70 members of the National People's Congress are worth over $90 billion? Do you really think they made their money selling widgets legitimately?

Sure there is some clean money buying property in the West, but it would be naive to think that the vast majority of it hasn't been made in what most would consider an illegitimate fashion.

he took a finance 101 class so he thinks he knows it all now

>Just go to China/Brazil/India/Russia and try to run a business without paying people off - and not being politically connected.

http://topics.nytimes.com/top/reference/timestopics/organizations/n/new_york_city_police_department/ticketfixing_scandal/index.html

http://www.nypost.com/p/news/opinion/editorials/judges_jobs_injustice_LW7W0vM1OBKDM2fb4k6eiL

http://online.wsj.com/article/SB10001424052702303459004577360331597298696.html

>he took a finance 101 class so he thinks he knows it all now

Who was his teaching assistant?

this clown recently learn the correct spelling of the word "bo xilai" so he thinks he knows about china

the reason Bo got ousted is because Bo fight against corruption

Well, no, actually Bo got ousted because his wife is involved in a murder investigation. And if he was fighting against corruption, then it was certainly a lucrative field for him and his relatives for they have made millions off of state run companies and subsidiaries and real estate. As this article points out, and I suggested in an SE post several days ago, this incident will open a can of worms about government officials hoarding wealth and taking it out of the country.

http://www.nytimes.com/2012/04/24/world/asia/bo-xilais-relatives-wealth-is-under-scrutiny.html?hp

so all those with at least family member involved in a murder should buy RE in a great city outside from China... Realtors should now advertise USA advantages such as: "even when everybody knows you did it, you can get out on a very small bail, just like the Trayvon Martin case"

hey, bullish for NYC RE!

apt23 didn't do a google search on "caonima", a rather offensive term for any self-respecting female.

http://www.nytimes.com/2012/08/05/realestate/big-deal-in-london-real-estate-taxes-rise-but-will-buyers-flee-to-us.html?_r=1&pagewanted=2&ref=realestate