Has New York’s luxury property market bounced back since Covid-19? Brooklyn and Manhattan are booming, meaning now may be the best time for landlords to invest

May 7 , 2022

The new Brooklyn Tower is the tallest building in the desirable New York borough. Photo: Gabriel Saunders

The exodus from the Big Apple due to the pandemic is reversing as residents return to the city’s wealthier neighbourhoods – and they’re keen to buy their own properties

Condo contracts are on the rise: supertall residential building Brooklyn Tower boasts amenities from poolside lounges to coworking spaces while Front & York offers resort-style flats

New Yorkers are back, baby! Migration statistics show a reversal of the pandemic-fuelled urban exodus experienced in 2020, with residents now returning to the city’s most popular boroughs.

Analysis of United States Postal Service (USPS) change of address data shows that New York City’s net residential outmigration tripled from 2019 to 2020. The wealthiest neighbourhoods bore the brunt, with those living in the top 10 per cent of locations (as measured by median income) 4.6 times more likely to move than other residents during 2020.

This trend was unusual, notes the analysis published by the Office of the New York City Comptroller, because in a typical year more people move into the Big Apple than out of it.

Since July 2021, USPS data has shown a gradual return to the Big Apple, mainly in neighbourhoods that experienced the greatest flight

However, since July 2021, USPS data has shown a gradual return to the Big Apple, mainly in neighbourhoods that experienced the greatest flight: notably, in Brooklyn, where net move-outs more than tripled from 8.3 to 28.7 per 1,000 residents in 2020, and Manhattan, where the numbers almost quintupled from 19.0 to 91.9 per 1,000.

Front & York in Brooklyn’s Dumbo neighbourhood has wide views of the river and Manhattan. Photo: Williams New York

Highlighting the overall appeal of the top end of town, those moving out of the wealthiest neighbourhoods in 2020 were also most likely to return. Almost half of the people who had filed a postal change of address form indicated their move would be temporary, compared to less than 30 per cent in all other areas.

The returnees seemingly brought with them a new appetite for property ownership.

According to Miller Samuel and Douglas Elliman, Knight Frank’s residential partner in the US, flat sales in Manhattan reached 3,559 in the three months to the end of December 2021, the highest of any final quarter in 30 years.

Kate Everett-Allen, head of international residential research Knight Frank, says this renewed sense of confidence is influencing the luxury market, with 1,877 contracts signed at US$4 million and above in Manhattan in 2021, totalling more than US$15.9 billion – a record performance for the city since 2006.

Brooklyn’s performance was equally strong in the fourth quarter, with the median sales price rising 7.5 per cent year over year to US$941,000, setting a record for the fifth straight quarter and hitting 17.6 per cent above the same period in 2019, before the pandemic.

Suggesting that trend is continuing, new signed contracts for condos in Brooklyn were up 13.4 per cent in March 2022 year on year. In a trend that is good for landlords – although not so for renters – median rents in Brooklyn rose 10.5 per cent the year to February 2022.

Downtown Brooklyn is the third-largest central business district in New York City and home to a robust technology and innovation sector, vibrant shopping and is in proximity to more than 100 arts and cultural institutions

Georgina Atkinson, head of US sales at Knight Frank Asia-Pacific