April 18, 2008

Manhattan home prices soar 41% to US$1.6m despite slowing economy

NEW YORK - THE average price of Manhattan homes defied the slowing US economy and soared 41 per cent in a year, to US$1.6 million (S$2.16 million) in the first three months of 2008, an industry group said on Thursday.

Manhattan's surging real estate prices drove a citywide increase of 28 per cent, while prices in the boroughs Queens, Staten Island and the Bronx began to slip, according to a report by ResidentialNYC.com, a Web site managed by The Real Estate Board of New York.

'The report shows that Manhattan's luxury market for high-end properties continues to remain untouched by the slowing economy,' said board president Steven Spinola. 'Manhattan condominiums in particular continue to sell for record high prices.'

The study looked at prices in the first quarter of the year and compared them to the same period in 2007. In Manhattan, the average price for a home in the first quarter of last year was US$1.1 million.

In Brooklyn, prices rose an average of only 3 per cent, to US$582,000. Average prices in Queens and Staten Island were both down by 5 per cent, at US$458,000 and US$427,000 respectively. Average prices in the Bronx slipped by 1 per cent to US$396,000.

The report - using city data for recorded real estate transactions - tracks the sale of all residential property, including private houses that could be one to three-family dwellings, condominiums and cooperatives.

Strong sales in new luxury developments in these locations drove the increases, feeding what Mr Spinola called 'a pent-up demand' for housing in a city with limited space and a recent spate of construction. The falling dollar has also made New York real estate appealing to foreign investors.

The neighbourhoods with the highest average housing prices were in Soho and Tribeca, reflecting the areas' generally larger properties.

The Real Estate Board of New York is a trade association with 12,000 members. It represents property owners, builders, brokers, managers, banks and financial service companies. -- AP