In real estate, knowing your market is everything. As a native New Yorker and a second-generation owner of a top NYC brokerage, I know the ins and outs of my housing inventory, neighborhood profiles and customer base.
Because New York is a truly global city, foreign buyers make up a large percentage of the clients that my agents work with, both on the investor and residential levels.
The U.S., and New York especially, are considered a safe hedge for global currencies around the world, especially if the originating country has strict tax laws, cashflow crackdowns, political turmoil — or a perfect storm of all three!
On a recent trip to Asia, I saw firsthand why American real estate is such an attractive prospect. New York housing is viewed as an appreciating asset by many, and as a result, we’ll often get foreign buyers scooping up properties in coveted ZIP codes, shiny new developments and in bulk purchases — sometimes three, four or more units at a time.
However, we find most Asian buyers are just looking for something simple, quality and not outrageously priced, where their money will be safeguarded and perhaps grow their equity over time.
China’s Ministry of Commerce reports that Chinese buyers accounted for $15 billion in overseas real estate in the first half of 2016, with the U.S. a top destination.
Considering this significant outflow of capital from Asian countries to the U.S., it’s important to know and understand what these potential buyers are looking for, which can best be discovered by seeing where they’re coming from.
Here are four important lessons I learned about the housing market from my recent trip to Asia:
Bedrooms over floor plans
In Hong Kong, floor plans are based on the number of bedrooms, not square footage.
The more bedrooms a home has, the higher the price of the home. Because bedroom count is paramount, you don’t see the grand scale kitchens or living rooms that draw bigger price tags in the U.S. Homes there are functional, as people spend most of their socializing time away from the home.
Spaces are small — it’s true!
You’ve probably seen these tiny pod-like excuses for apartments in the movies or micro-unit documentaries, but it’s pretty much the preferred housing stock in places like Singapore.
You’ll never see a bathtub, as it wastes space. Bathtubs are considered a luxury one only finds in hotels.
Luxury is scarce in Tokyo housing
I always thought Tokyo was synonymous with big luxury brands, but that market simply doesn’t exist on a significant level right now in housing. You won’t see many sprawling, palatial homes. Every inch of space is maximized for efficiency.
However, there are a lot of decent options for homes between $1 million and $3 million.
New York apartments are huge by comparison
Reading the news, you’d think every apartment in New York is either a massive McMansion in the sky or a tiny micro-unit where people eat, sleep and exercise on a clever bed/table/bike conversion that’s built into the wall.
The truth is, there is a vast swath of inventory between the two, and compared with the average apartments in cities like Tokyo, New York apartments are huge. Because space is a true luxury in many Asian countries, their definition of what it means to be “too close for comfort” is very different from ours.
They are much more formal in their everyday lives because less space means you must be more conscious of everyone around you.
By visiting so many different places within Asia, I gained a better understanding of the lifestyle. As is the case with any client, understanding is the key to providing them the most meaningful service.
Elizabeth Ann Stribling-Kivlan is the president of Stribling & Associates.
