Sky's the limit for the price of air above New York City

Not even the air is free in New York City. Quite rightly regarded as one of the world's most expensive cities, the newly valued price of air itself is enough to leave you gasping for breath.

Yet for city analysts and appraisers, last week's news that two New York City developers paid a record-setting US$430 per square foot in 'air rights' confirmed a Manhattan market where 'nothing is shocking' any more.

Brothers William and Arthur Zeckendorf want to build a 35-storey luxury apartment tower, boasting views of Central Park.

To do so they had to obtain unused air rights over Christ Church and the Grolier Club at Park Avenue and East 60th street, and so will fork out more than US$30 million to the former and US$7 million to the latter to secure the unutilised construction space that hangs above both properties. On a space-squeezed island such as Manhattan, after all, the only direction for developers is up.

'We want to concentrate on the very high-end market where we see tremendous strength and a limited inventory,' Arthur Zeckendorf told The New York Times.

In doing so, the brothers' sense of ambition flies in the face of warnings by analysts that the property bubble is about to pop, having paid over twice the going rate for air in the city.

'Looking at the luxury market, there's strong confidence in it,' said Gregory Heym, chief economist at Halstead Properties.