Boom year for super-prime US properties

 

Dec 21, 2012 - PropertyGuru.com.sg

By Romesh Navaratnarajah:

While the US property market is slowly moving back to a healthy level following the aftermath of the 2008 financial crisis, the super luxury segment has been surging due to hot demand from billionaires. In 2012, this group snapped up multi-million dollar mansions and penthouses creating record-breaking sales.

In Miami, an anonymous Russian buyer forked out US$47 million (S$57 million) for a 30,000 sq ft modern mansion back in August. Located at 3 Indian Creek, the property boasts an auto showroom and entire “spa pavilion”.

But no other US city has come close to the sky-high prices in New York, especially the apartment buildings near Central Park in Manhattan. In February, Russian billionaire Dmitry Rybolovlev purchased a US$88 million (S$107 million) penthouse for his daughter. The price translates to about US$13,000 psf (S$15,861 psf), the highest psf price paid in the country.

As a result, property developer Extell Development has increased the asking prices at its nearby high-rise project – One57.

Despite the high prices, wealthy buyers still bought units. Among them are Silas Chou and Lawrence Stroll, business partners behind the IPO of fashion label Michael Kors. Both purchased full-floor units for around US$50 million (S$61 million) each.

Meanwhile, Dreamworks co-founder David Geffen bought a 12,000 sq ft penthouse in the nearby Parc Cinq building for US$54 million (S$66 million) last month.

“Luxury real estate in 2012 has become the new global currency,” said Jonathan Miller, Chief Executive at appraisal firm Miller Samuel.

“It’s become all about capital preservation as opposed to seeking out returns — and markets with upper-end housing stock are clearly benefitting.”