Pricey New York real estate might get even more costly whether or not Britons vote to shuck their membership in the European Union, and millennials might see either more competition from foreign investors pricing them out of the market, or will benefit from falling interest rates -- cheaper mortgages --engendered by a faltering global economy.
With the Brexit vote looming Thursday, high-net-worth real estate investors -- both individual and institutional -- are eyeing New York and other gateway US cities as safe havens, spooked by uncertainty that has crept into the London market in the last year, not only as a result of the contentious Brexit campaignbut also because of recent policy changes involving visa approvals and real estate taxes.
New York real estate attorney Edward Mermelstein said big-money foreign investors have been shifting to the US market for the past year, and the turmoil generated by the Brexit campaign has escalated the trend.
"There is a fairly strong consensus the British economy is going to be negatively affected by Brexit," Mermelstein said. "Paired with what has been happening recently in the investment atmosphere, its only going to put additional pressure on Britain as a place to invest."
Lawrence Yun, chief economist at the National Association of Realtors, estimated that foreigners invested $80 billion in US real estate last year. Overall, US real estate is worth approximately $22 trillion, about 2 or 3 percent of it controlled by foreign investors.
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