Posted by Leonard Steinberg on September 22nd, 2012

Is BRICFLATION upon us? In this morning’s Financial Times a story addresses a potential pricing bubble in the Central London new construction real estate market, where it was identified that just under 20% of the buyers are UK citizens and the majority buyer pool are foreign, mostly from the far east. With growth slowing in these countries, is there a pricing bubble at play?

New York has been aflutter with talk of ‘all the foreign buyers’, and indeed they have become a sizeable force: Are they artificially boosting pricing here too? What is the percentage of foreign buyers? 5%? 10%, 25%? Data is showing that the vast majority of buyers are indeed domestic, although at many of the brand new buildings (and there are not that many……yet) a good chunk of the buyers have indeed come from BRIC countries. Is this demand pushing pricing up beyond reality? New York pricing is still comparatively cheap next to London. In Miami a huge pool of foreign buyers has helped a recovery, especially in prime new buildings.

Only time will tell in Manhattan how much of the coming construction boom will be bought up by local or foreign buyers: And will BRICFLATION be a concern in the coming months and years. One 57 certainly has a large chunk of foreign buyers, but that is a mere sliver of the market…..when those units close in 2013, watch out for those prices boosting averages artificially for sure.