With the strength of the forlorn U.S. dollar actually gaining some ground in recent weeks, it's time to revisit the Great Foreigner Debate. Specifically, what will happen to Manhattan's condo market if our dollar starts to pick up serious steam, and all those international buyers who have been propping up the industry lately suddenly aren't as rich as they once were. In fact, Elliman's Luxury Loft team of Leonard Steinberg, Herve Senequier and associates tackle this very topic in their latest Luxury Letter, so let's plagiarize a little. A strengthening of the dollar, they write, "would more than likely encourage an initial burst of foreign buyers trying to capitalize on their currency before it’s too late." Is it even possible for them to buy any more property? Team Luxury Loft continues:
After that, you may see several foreign buyers cashing out. We believe though that most foreign buyers will stay put, rather keeping some of their assets tied up in a stronger dollar than in other weakening currencies where political and social stability may not be as reliable. If you were a wealthy Russian, subject to an increasingly alienating government, would you want your money in Moscow or Manhattan?So Africa-Israel is targeting the right group of buyers with their Versace-clad Clock Tower, da? But what say you, market observer? If America makes a comeback, will foreigners flee? And will domestic buyers (USA! USA!) replace them?
· Luxury Letter [luxuryloft.com]