A Record $11.9B Has Gone into Building New Condos, but Few Apartments Actually Produced
Norman Foster’s 551W21 under construction
The NYC luxury real estate market is as hot as ever and developers are scrambling to get in on the action. The Daily News reports that a record breaking $11.9 billion was poured into new developments last year, a 73 percent jump over the last 12 months, and up $5 billion over the previous record (source: New York Building Congress). While this rise may seem like great news in a city facing a serious housing crisis, the bounty going towards new construction isn’t doing much to remedy it. The paper adds that though spending is way up, the bulk of the cash is being funneled “into delivering only a few massive high-end pads with luxe finishes targeted at the global elite.”
The homes being constructed are more along the lines of One57 and 432 Park as opposed to your run-of-the-mill condo geared towards middle class buyers—and for good reason: Units in these luxury towers can command eight-, if not nine-figure asking prices. As we previously reported, it is projected that just five new luxury developments will account for one-third of the new development sales over the next five years. Frugality over finishes is totally out of the question. “Developers need to spend a lot and deliver that razzmatazz if they’re going to attract these types of buyers,” real estate broker Jason Haber of Warburg Realty told the Daily News.
Only 20,329 units were created last year, just 11 percent more than the year before. 30,000 units of new housing were created annually between 2005 and 2008.
[Via NYDN]
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