U.S. Inflation Rate and Manhattan Real Estate
Posted by Wei Min Tan on November 22, 2021
New York property agent Wei Min Tan explains how the U.S inflation rate affects Manhattan real estate, and why investors from all over the world are buying Manhattan real estate.
We have been in a low inflationary environment for many years, but in 2021 inflation is at 6 percent.
This is one of the reasons why investors from all over the world are buying Manhattan real estate, because Manhattan real estate is one of the best inflation hedges in the world. Manhattan prices do not go up tremendously like in emerging markets, but prices are stable – that is key. Investors want stability and assurance that the asset’s price is well protected against inflation.
The reason why Manhattan real estate goes up steadily is because of inflation and limited supply.
Manhattan condos are only 10 percent of the housing inventory in the island of Manhattan. That is why prices are stable, because supply is limited. In contrast, the average U.S city has so much land, and developers can keep building out from the city’s core. Manhattan is landlocked and you cannot build many buildings any more.
Inflation used to be in the teens during the 80’s and it has been less than 4 percent since the 90’s. In 2021, inflation is at 6 percent. The biggest driver behind the inflation index is housing prices. Inflation means housing, tangible assets and goods in general are increasing in price.
Global investors are looking for a hedge, and Manhattan real estate is an excellent option.
This is how inflation and Manhattan real estate relate to each other.
What We Do
We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale
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