HALF of Manhattan’s new luxury skyscraper condos sit unsold and empty after foreign oligarchs appear to lose interest in the New York property market
- Data shows half of Manhattan condos built since 2015 have never been sold
- The luxury condo market has cooled even as the economy continues to soar
- Experts point to the soaring cost of new units compared to resale units
- Developers have been marketing extreme high-end units at foreign oligarchs
- But for foreign billionaires seem to be losing interest in NYC real estate
Manhattan’s ultra-high-end condo market appears to be in a slump, with nearly half of all units built in the past five years sitting unsold.
Of new condo units in Manhattan that came to market after 2015, 48 percent, or 3,695 of 7,727 apartments, remain unsold, according to an analysis of sales data by Nancy Packes Data Services, a real estate consultancy and database provider.
During the same period though, resales of older condos have skyrocketed — highlighting the growing divide between older units and newer construction that was built with Saudi and Russian oligarchs in mind.
‘The extraordinary oddity of the current cycle is that the real estate market has decoupled from the national economy and local economy, where job growth has been steady and stock market values have been reaching new highs,’ according to the Nancy Packes report.
A view of Central Park is seen from Billionaire’s Row. Manhattan’s ultra-high-end condo market appears to be in a slump, with half of all condos built since 2015 remaining unsold
The view is shown from inside the tallest residential skyscraper ‘One57’ in New York on Billionaire’s Row, where Michael Dell spent $100.47 million on a penthouse
A chart shows the growing difference in price between new condos (green) and resale units (yellow) from an analysis by Nancy Packes Data Services
The report, which looked at buildings with 30 units or more, says the slowdown was ‘not obviously caused by supply,’ and suggests that pricing may be the key factor.
In recent years, Manhattan has seen an explosion of new condo units targeted at the obscenely wealthy — most prominently on Billionaire’s Row near the south end of Central Park.
The price of a new condo is now 118 percent higher than a resale unit on average, up from just a 9 percent difference in 2005.
Last month, one penthouse on Billionaire’s Row was sold to hedge-fund billionaire Dan Och for a staggering $92.7 million, making it the third-priciest unit ever sold in New York City.
Nearby, computer mogul Michael Dell spent $100.47 million on a penthouse at tower One57 off West 57th Street, and another unit in 220 Central Park South, the same building as Och’s, sold for close to $240 million to hedge fund manager Ken Griffin.
Hedge fund manager Ken Griffin bought New York’s most expensive home in 22 Central Park South (above) where he paid nearly $240 million for a penthouse
However, the foreign billionaires that the buildings were intended to attract do not appear to be flocking in as expected.
‘Developers bet huge on foreign plutocrats—Russian oligarchs, Chinese moguls, Saudi royalty—looking to buy second (or seventh) homes,’ writes Derek Thompson for The Atlantic.
‘But the Chinese economy slowed, while declining oil prices dampened the demand for pieds-à-terre among Russian and Middle Eastern zillionaires,’ he says.
In addition, the U.S. Treasury Department in recent years began to aggressively crack down on attempts to launder foreign billions through the U.S. real estate market.
The result: some of the most expensive real estate on the planet sitting empty, and half-vacant skyscrapers gazing over Central Park.