• Tue
  • Sep 2, 2014
  • Updated: 7:12pm

Manhattan market offers up bargains

PUBLISHED : Wednesday, 13 July, 2011, 12:00am
UPDATED : Wednesday, 13 July, 2011, 12:00am
 

With home prices in Hong Kong surging, investors are likely to consider that condominiums in Manhattan are underpriced.

That is certainly the case for businessman Patrick Ho, who has bought three apartments - one on Wall Street, another close to Fifth Avenue and one in Brooklyn - for a total of about US$4 million.

Attracted to the market as a result of depressed prices, he bought his first apartment in 2009 - a 700 square foot, one-bedroom flat on Wall Street. It came with a lease contract and he timed his entry at the market bottom.

'I bought at less than US$1 million as there was panic selling in the market shortly after the outbreak of the global financial crisis. And the unit is leased out for US$3,500 per month. So it has provided an income from day one,' Ho said. 'The rental yield in New York is about 5 per cent, which is higher than the between 2 per cent and 3 per cent in Hong Kong.'

Then he bought a three-bedroom flat in Williamsburg, Brooklyn, an area described by Grace Leung, a licensed agent at property agency CitiHabitats, as a new satellite city that is attractive to young couples who cannot afford to buy or rent in Manhattan. The area is accessible by subway to the city centre.

Ho said the flat in Williamsburg, which cost him about US$1 million, had been leased as well.

And last month, he bought a one-bedroom apartment at The Centurion, a short walk from Fifth Avenue, for US$2 million.

'The latest one is the most expensive because of the prestigious location. But for the same amount in Hong Kong, I could not even buy a unit in West Kowloon,' Ho said.

He said it made no sense that Hong Kong home prices were more expensive than New York, a city to which he travels frequently for his garment-trading business.

He paid cash for all three apartments. 'By paying cash, a buyer will get a discount of between 5 per cent and 20 per cent, depending on the negotiation,' he said.

The apartments could be used as investment and later would be used by his children when they studied in New York, he said.

He said the negative side of the New York market was high management fees and taxes. A capital gains tax of between 15 per cent and 20 per cent would be charged on profit made from the sale of a property when a foreigner repatriated the money back home, he said.

When the US housing bubble burst in mid-2007, developers began offering discounts to lift sales. Among the discounted units available were those at The Sheffield on West 57th Street and 8th Avenue, close to Columbus Circle and Central Park.

The project has sold 70 per cent of the 845 flats since it was put on the market in 2008, said Sherri Shang, managing director of world sales for the Asian division of Prudential Douglas Elliman Real Estate. At present, the cheapest unit on offer is a 608 sqft flat priced at US$775,000.

For buyers with deeper pockets, Trump SoHo's penthouse may be an option. The developer earlier this month launched the project's two penthouses for sale at a discount of about 25 per cent from their original price set in 2007.

The penthouse flats, of 1,172 sqft and 2,022 sqft, are on sale for US$4.39 million and US$8.74 million respectively.

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