Foreign investors returned to New York City’s real estate market in 2023, claiming the highest share of the buyer pool since 2019, according to a report by Avison Young. International buyers constituted 32.4% of the city’s investors in 2023, surpassing figures from 2021 and 2022 and slightly edging past the 32.3% recorded in 2020.
The city’s domestic investors scaled back amid 2022’s rate hikes and tightening financing markets, providing an opening for overseas buyers who could afford an all-cash approach. Qatar and Japan emerged as the top two buyers by dollar volume in 2023, with Qatar-based firms leading with deals surpassing $1 billion and Japanese investors closely trailing with nearly $1 billion.
While foreign investors dominated the scene in 2023, the Federal Reserve’s potential three forecast rate cuts could level the playing field, leading to heightened competition between international and domestic buyers in 2024. The all-cash advantage that foreign investors enjoyed in 2023 might be partially offset by the improved affordability of financing for local buyers.
As a result, the market may see a more balanced distribution of investment between foreign and domestic players. Overall, the evolving dynamics present both challenges and opportunities for investors, and adaptability to changing market conditions will be crucial for success in New York City’s real estate landscape in 2024.
