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‘Amazon effect’ has Chinese buying in Long Island City

China Daily | Updated: 2018-12-10 23:49
The waterfront of Long Island City, in the New York City borough of Queens, where Amazon.com Inc plans to locate half of its second headquarters. The online retailer’s announcement has caused an upsurge in interest in real estate in the area. [PHOTO by BELINDA ROBINSON / for CHINA DAILY]

A one-bedroom apartment could cost $950,000. A two bedroom $1.32 million, and a three bedroom could set you back $2.1 million.

Call it the “Amazon effect’’.

Prices and sales of residential properties in New York’s Long Island City have spiked after retail giant Amazon.com Inc announced in November it would build one of its two new North American headquarters there and employ 25,000 people.

The “Amazon effect” — as the trend is being dubbed — has savvy Chinese seeking property in an area that’s just 15 minutes from Manhattan by subway and has a waterfront that faces the East River.

The New York Post reported that property sales in Long Island City shot up by 30 percent last month compared with the same period last year.

Investors are aiming to buy one-bedroom apartments for just under $1 million, according to local real estate brokers. Some will live in the apartments, while others plan to rent them to future Amazon employees. The average monthly rent for a one-bedroom apartment in Long Island City is around $3,100.

Patrick W. Smith, a Long Island City broker and real estate expert for Stribling and Associates, said that he has seen demand for housing in the waterfront area of Long Island City skyrocket since Amazon made its announcement on Nov 13, and he expects the trend to continue well into 2019.

He said that he has been running multiple minivan tours of properties weekly for Chinese investors eager to snap up luxury apartments.

“There’s a great deal of demand, and we take at least 50 people on viewings per week,” Smith told China Daily. “That’s a lot of people, and it’s increased since Amazon announced its second headquarters would be here. A one-bedroom will cost you anywhere from $950,000 to $1.5 million.”

The Chinese buyers are mostly those who immigrated to the US from China and are naturalized, and their children – first-generation Chinese Americans, according to Smith.

The once aging industrial region in the borough of Queens with a population of about 80,000 has seen more than 3,000 apartments built in the first six months of this year, according to the building website Localize.city.

Popular residential buildings include Chris Jiashu Xu’s Skyline Tower, an 802-unit building projected to sell all of its condos for a total value of $1 billion, along with Arcadia 27 and Galerie, a 128-unit condo.

“We opened in February and per week we would see 30 to 40 people,” said Teresa Ali, sales manager for Halstead Property, the sales agent for the luxurious Galerie condos. “Now we see on average 100 people per week. We have had a lot of calls from people in China. It’s always been a good source of traffic, but it’s definitely increased.”

The lowest price for a one-bedroom apartment is $950,000, a two-bedroom starts at $1.325 million and a three-bedroom goes for $2.1 million.

Ali said that many who want the condos are parents who live in China and the US, and who want to purchase them for their children who live in New York City. She hired a Chinese sales associate to speak Mandarin to Chinese clients, and the company’s brochure is in English and Chinese.

Smith, with Stribling and Associates, said that his Chinese clients don’t have patience for gimmicks.

“For example, sometimes listing agents will set a price, rather than using a natural number, such as $1,600,000, the listing agent would use $1,600,888, with the theory that including the number 8 would somehow make the apartment more appealing to Chinese buyers,” he said.

“If 8 is naturally occurring, such as a floor number, a street or building address, that could be considered lucky. Having said that, Chinese buyers are sophisticated, and they are not interested in contrived marketing concepts such as the pricing trick.”

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