One57, a new luxury skyscraper apartment building designed by French architect Christian de Portzamparc which is under construction on New York City's West 57th street, is pictured April 24, 2014.
For the first time, the Chinese have become the biggest foreign buyers of apartments in Manhattan, real estate brokers estimate, taking the mantle from the Russians - whose activity has dropped off since the unrest in Ukraine and the imposition of sanctions against Russia by the United States.
Wealthy Chinese are pouring money into real estate in New York and some other major cities around the world, including London and Sydney, as they seek safe havens for their cash and also establish a base for their children to get an education in the West.
Reuters asked five of the top real estate brokerages for their ranking of foreign buyers in New York City. The Chinese ranked first in both volume and value of sales in all their estimates. Opinions differed on just how the Russians, Europeans and South Americans stacked up next.
There are no official figures collected on the national and ethnic backgrounds of home buyers because of U.S. fair housing laws, designed to protect against discrimination.
The Chinese interest is mainly a valuation play, real estate experts say. After the U.S. housing bust in 2007-2010, home prices in major U.S. cities fell to levels that made them attractive. While U.S. prices have been recovering, they are still appealingly low by comparison with many other parts of the world.
Many Chinese buyers are switching their interest away from markets like Shanghai, Hong Kong and Singapore amid fears that prices have soared to frothy levels in those cities. Hong Kong has the second most expensive housing market in the world, behind Monaco, with Manhattan trailing in sixth place, according to British real estate research firm Knight Frank.
The brokers say that many Chinese buyers are also investing abroad so they can own property near major educational institutions. Some are buying homes near top colleges — even though their children are so little they can't walk yet. More than 80 percent of wealthy Chinese want to send their children overseas to school, according to the Hurun Report, a Shanghai-based publication.
"By far and away, the Chinese are the fastest growing demographic," said Dean Jones, a U.S.-based broker with Sotheby's International. "They are the top consumer for real estate, and New York is front and center."
Added Pamela Liebman, CEO of the Corcoran Group, one of the best known New York real estate firms: "In sheer numbers, the Chinese outspend the Russians in every segment of the market."
The Russians: "they're gone"
In Manhattan, it wasn't long ago that Russian oligarchs dominated the gilded world of real estate, gobbling up status-heavy, marquee properties, such as an $88 million, Robert A.M. Stern-designed penthouse and a $75 million mansion with a ballroom and a rooftop aerie.
Now, many brokers say, Russian buyers have become scarce largely because of fears that the struggle over Ukraine will worsen leading to increasingly tough U.S. sanctions on politically-connected and wealthy Russians.
"They're gone, they're gone," said Sotheby's International broker Nikki Field, "They've been gone since the Crimean outbreak."
The Chinese grew to 28.5 percent of Field's international business in the first quarter of 2014, up from 19 percent last year. "We've only scratched the surface with Chinese demand," Field said.
Chinese buyers typically used to pick up properties in the $1 to $5 million range in New York, often buying two and three at a time for investment purposes, the brokers said.
But lately they have been moving up market, brokers say. The current in-vogue building among the Chinese is Central Park's One57, a new skyscraper designed by Pritzker Prize-winning French architect Christian de Portzamparc, where they can spend $18.85 million for a three-bedroom or $55 million for an apartment taking up the entire 81st floor. The building comes with all of the amenities of a five-star hotel.
The Chinese are also venturing out to Long Island, where they are buying Gatsby-esque mansions set atop rolling greens.
Broker Shawn Elliott ferries around groups of Chinese buyers in Rolls Royce and Mercedes-Benz luxury sprinters every week, often catering to entire families at a time.
"They're looking for trophy properties," said Elliott. "They're looking for their children to be comfortable, and to be near Columbia or New York University."
Some Chinese aren't even bothering to come to the United States at all, going so far as to pick up multi-million-dollar properties sight unseen.
One Chinese buyer recently purchased two properties, worth $13 million, at the Baccarat Hotels & Residences in New York. The entire deal was done via the Chinese social networking site WeChat, according to the broker who did the deal, Douglas Elliman's Emma Hao.
"I think the Chinese trend is onwards and upwards," said Liam Bailey, a partner with Knight Frank. "There will be more Chinese buyers, and they will take more share of the market."
New York isn't alone.
In Sydney, the Chinese became the top buyers of new luxury homes last year, according to sales research conducted by Knight Frank.
Shanghai businessman Wang Jiguang has already picked up two houses in another major Australian city, Melbourne, and one apartment in Sydney. "My child is going to study abroad, and we are just preparing some overseas assets for our child, which will be less risky," Wang said in a telephone interview from Shanghai.
Mainland Chinese were the top foreign investors in Australian real estate last year, according to Australia's Foreign Investment Review Board. They bought $5.9 billion worth of property, accounting for 11.4 percent of total foreign investment in real estate, FIRB said.
The data includes both residential and commercial properties. But the average value of the purchases for China is the lowest of all the countries, which suggests a large number of the deals are for residential property.
Monika Tu, a broker at top-end real estate firm Black Diamondz Property Concierge in Sydney, says that over the past year mainland Chinese have become 80 percent of her company's business.
"There is nearly no local market for top-end properties," says Tu.
That fact has made the local headlines, with some accusing the Chinese of "pricing out local buyers". In March, Australia's federal parliament announced an inquiry into foreign investment in the sector in a bid to find out whether local real estate deals are being properly policed.
In Manhattan, some locals are also starting to grumble, brokers say, about the new "China Price", a phenomenon that can see Chinese buyers sweep in and outbid other buyers, often with all-cash offers.
In London, robust property laws and British universities are a big draw for the Chinese. They became the city's number one foreign buyer last year, according to Knight Frank, accounting for 6 percent of all purchases over 1 million pounds ($1.68 million). The Russians accounted for 5.2 percent.
"The Russian buyers are a maturing market," said Bailey. "And they aren't growing anything like the Chinese buyers."