Brexit, short for a “British Exit”, is a referendum of the United Kingdom’s membership in the European Union (EU) which shook the world. The referendum took place on June 23rd, 2016 where the vote to leave won by 52% to 48%. So what does this mean? Well in short “The UK will continue to abide by EU treaties and laws, but not take part in any decision-making, as it negotiates a withdrawal agreement and the terms of its relationship with the now 27 nation bloc” (BBC News)
Now let’s look at its effect on the New York City Real Estate market:
The immediate effects of Brexit have impacted the entire global economy such as the Dow, that fell more than 500 points and the British pound dropped significantly in value. Despite the pandemonium, this can have a positive effect on the New York City real estate market which has proved to be a stable place to store wealth. Due to the two-year time period the EU gave to the British to revoke their exit means there will be continued economic and cultural uncertainty. This benefits NYC in its ongoing competition with London as the world’s financial capital. Ed Mermelstein, a Manhattan-based international real estate attorney told Brick Undergorund, a trusted NYC source of real estate advice, before the vote, “A capital gains tax was recently implemented on foreign investors in England and new visa requirements have created issues for foreigners looking to live there,” which only steers investors away. The results are that we plan to see more luxury buyers choosing NYC as a safe haven over London’s real estate. On the other hand, the weak British pound will hinder the Brits affordability here. Though be sure to note that the Brexit is most likely to only have an effect on the luxury market of NYC so greater than five million rather than the common million dollar residential apartments. For global investment in real estate, New York city has proved to be a safe bet for now and the coming years.