Manhattan property market

If you are a home owner or land lord in Singapore, you better pray that more foreigners keep coming in and that the jobless rates don't explode. If we look at Manhattan where the job market was hit by the financial crisis they caused, we see a fall of property prices and rental rates.

If the recession continues for more than a year in Singapore, these foreign talents will leave our shore and cause a vacuum in demand; driving down the prices.

Well, detractors may point to the rise in HDB prices over the past year. Have you ever thought that the rise could be temporary? That it could be due to people downgrading from their private properties to public housing. When the situation gets worse, where will they downgrade to? And when that happens, what will happen to the prices of their HDB flat?

Bargains galore in Manhattan Rentals

New York Post- Tom Topousis July 9 2009

With the recession in full gear and unemployment at a 16-year high, the number of Manhattan rental apartments languishing on the market shot up 28.8 percent in the second quarter of the year, a new study has found.

The booming inventory helped to deflate rents.

Comparing prices by the square foot, rents this past quarter dropped 17.5 percent in the second quarter of 2008, said the report's author, Jonathan Miller, of Miller Samuel Appraisers, which conducted the survey for Prudential Douglas Elliman.

"When you're looking at a weaker rental market and lower activity, it's tied directly to rising unemployment and the recession," Miller said.

The state Labor Department last month reported unemployment in the city at 9 percent, with 361,000 city residents out of work -- more than at any time since 1993.

The listing inventory over the last three months included 7,290 apartments, up from 5,658 for the second quarter of 2008.

Miller said comparing apartment rent by square foot was the most accurate way to measure the market because the size of the units renting this year on average were 21.7 percent larger than for the same quarter a year ago.

So while the average rent for a Manhattan apartment dropped just 0.9 percent, to $3,839, in the second quarter of the year as compared with the same period in 2008, the report found that the average price per square foot plummeted 17.5 percent to $44.16.

The shift to larger apartments, Miller said, was fueled by first-time homebuyers who fled the rental market to take advantage of low-interest mortgages.

"Where do first-time homebuyers come from? They come from the rental market," said Miller, noting that those buyers typically rented smaller apartments like studios and one-bedrooms.

In fact, landlords rented 5 percent fewer studios and one-bedroom apartments in the second quarter of this year, compared with the same period of 2008, the report found.

Nationally, vacancy rates in the rental market hit a 22-year high at 7.5 percent, according to a study by the real estate research firm Reiss Inc. Despite Manhattan's woes, New York City still had the nation's lowest vacancy rate at 2.9 percent.

Meanwhile, a study of home sale prices across the city by the Real Estate Board of New York found that the average price of condos, co-ops and one- to three-family homes dropped 22 percent in the second quarter of the year, compared with 2008.

The average city home sold for $644,000 in the second quarter of the year.

Manhattan sales prices dropped the most, 19 percent to $1.3 million. Queens followed at 13 percent to $403,000; Brooklyn by 12 percent to $503,000; Staten Island by 10 percent to $388,000; and The Bronx by 9 percent to $356,000.

"It's important to keep sight of the fact that a lot of these price drops are coming off a record high last year," said Mike Slattery of the Real Estate Board.