Manhattan, my New York, is home to around four million people, but is occupied at any given point in time by, on average, eight million bodies. In Manhattan, around 66% of all the real estate is commercial (offices, retail spaces and everything but homes), while the other 33% are residential properties. Of this limited amount, only around 33% of all this residential real estate available in Manhattan is actually for saleable homes, while the rest of the inventory are rental properties. In addition, Manhattan is an island, with air rights and zoning restrictions, whose bounds cannot be exceeded. People need homes to live and while real estate is generally considered a solid investment anywhere, in New York City, which houses some of the most unique, recognizable and innovative minds in every field imaginable, including more of the World’s Fortune 500 Companies and their employees than any other city, the most pertinent question I feel regarding real estate here is not the typical “What makes New York real estate such a good investment”, but more accurately, with this comically limited supply and an overabundance of people requiring homes, "How is New York so affordable?"

With the record low interest rates, the answer to the question of “How is New York so affordable?” is being answered as you read this. The market price for Manhattan residential real estate went up an average 13% in the past year, and with a lack of new development inventory or the likelihood of rates increasing, as a real estate broker, I am perpetually busy. Every New Yorker who lives here wants to purchase. The average rental price is 10% - 20% more than the cost of owning an equivalent apartment on a monthly basis, and that’s without considering the tax deductibility of owning, the quality of a purchase property compared to a rental and the fact that homes for purchase are typically in the better neighborhoods and on their better blocks. The only individuals that make New York their home on a permanent basis who are not purchasing, are the stupid, and unfortunately those who do not have the financial capacity to make a down payment.

Reflecting on the numbers being positively geared to owning a property and renting it at a profit (10 – 20% per month), without considering residential property appreciation (91% between 2002 and 2012, which includes the 2008 crash, as well as 90% on average per decade since the growth statistics began being recorded), and remembering that we are talking about a city which some, bolder than myself, call the World’s capital, then you can appreciate why trying to justify investing in New York real estate to those who live and have grown up here is like flogging a dead horse…because everyone is, has been, and will continue doing it until the World as we know it ceases to operate in much the same way it has for the past few centuries. The 19th Century New York businessman, John Jacob Astor, whose amassed fortune in today’s terms would equal $110.1 Billion USD was quoted on his deathbed saying “could I begin life again, knowing what I now know, and had money to invest, I would buy every foot of land on the Island of Manhattan.”

Manhattan real estate’s virtue has never been a secret, and consequently there is never a “deal” to be discovered here. The market determines the price and we as brokers obtain the product for you with complete fiduciary responsibility to your best interest. It is only in retrospect that individuals tell jaded stories of the outrageously low price they could have bought a piece of New York real estate, and it is with that motivation, that the average time from sale listing to contract signing for New York apartments was 60 days during the last business quarter.

Looking for an investment that averages 9% growth per decade, while actually generating an income, in a market that is increasingly reducing its supply and suffering from overwhelming demand? Australia, welcome to New York. You’re very new to the party, it is exclusive, but you can feel comfort knowing the price of admission is the same for everyone. Just don’t make the mistake of being late.