You hear a lot about the US housing bubble and crash, prices are down all over the US since the peak, but in Manhattan luxury home prices have risen since last year. So what are the wealthy doing? Renting.
Adam Neumann and his wife set out in 2008 to buy an apartment in lower Manhattan, hoping to get a bargain on a 2,500-square-foot (232-square-meter) luxury unit.
Failing to find a deal, they chose an increasingly practical option for the city’s wealthiest residents: renting. They’re paying $300,000 upfront on a five-year lease for an empty TriBeCa loft with almost twice the space that the landlord will outfit to their design.
A price crash does funny things to perception. So why would the well-to-do choose to rent instead of own?
The money he’s not spending to buy “can go into my business,” said Neumann, co-founder of We Work, a New York firm that rents shared office space by the month. “In my business, my cash brings a much higher return than purchasing an apartment,” he said.
“The good times we saw in the past are not coming back anytime soon,” he said. “People are not going to buy a home for $1 million and see it worth $2 million in five years. I see the market going up but nothing like in the past.”
But what about here in Vancouver? Is that $1 million dollar home going to be worth $2 million in five years or are there potentially more lucrative sectors to invest in at this point?
