Lest anyone get too excited about the new De Blasio-run era of New York real estate or think that Bloomberg’s proverbial “Russian Billionaires” are a thing of the past, a friendly reminder that ultra-wealthy foreign investors are still here, and still driving up prices (as of November, they accounted for around 70 percent of all home sales in the borough). This particular reminder comes in the form of news that the massive new development at 421 Kent Ave. has been snapped up by moneyed Chinese investors who’ve never even seen the place.
From Brownstoner’s write-up:
The site, which takes up an entire block and is 3.75 acres, was stalled for years and traded hands a few times before Beijing-based developer Xinyuan Real Estate Co. bought it for $31,610,034.91 in 2012.
Units in the building, known as The Oosten, are now listed on SouFun, one of the nation’s biggest real estate sites. This is apparently part of a larger trend of Chinese buyers—who are used to a boom market and far less wary than Americans—investing in U.S. properties without ever seeing them first. If you’ve got the kind of money to casually buy yourself a New York condo on the internet, you’ve probably also got enough money to throw at potential problems that come up, after all. Forbes, which found the listing, explains it like so:
“The web ads include a toll free Chinese phone number where potential buyers in China can contact salespeople in China to buy homes in Brooklyn. […]
In what could become a new model paving the way for outbound investment by wealthy Chinese individuals and companies, Xinyuan and Soufun have created a closed loop whereby a potential buyer in Beijing or Shanghai could purchase a home in the US without ever leaving China or speaking to anyone physically in New York. The online promotions made no mention of financing channels for prospective purchases.”
Of course, there are potential drawbacks to buying a property you’ve never been to in a neighborhood you’ve never been to—a Forbes commenter noted that in Chinese, the ad mentions the South Williamsburg building as located in the fictional “Manhattan Central Business District”—but it’s doubtful that’ll slow this market down much. If you’re looking to find a place to live, this is your competition now.
Follow Virginia K. Smith on Twitter @vksmith.