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How the Brexit vote may affect the New York real estate market

It is not surprising that we have heard a great deal of “doom and gloom” news coming after Great Britain voted to leave the European Union. The so-called “Brexit” vote is expected to have reverberations across the United Kingdom and Europe.

 It is said that uncertainty is the enemy of growth. And since the British reportedly do not have a plan in place to leave the EU the uncertainty that comes with the latest vote is expected to stymie financial growth across Europe. That likely leaves investment in the United States (particularly in real estate) as a worthy alternative. This post will highlight a few reasons why. 

Low interest rates will continue – With the uncertainty in other international markets, the chances that Federal Reserve raising interest rates is unlikely. Indeed, rates were not likely to be raised before December, but with the latest dose of uncertainty, the likelihood of an extended period low interest rates appears high.

Higher valuations will be expected – The low interest rates will create higher valuations in a number of property classes, according to a recent report. Essentially, the ability to use cheaper money to acquire properties is likely to drive up demand, which in turn, will drive up prices for such properties.

Foreign investment will continue – With the U.S. being more certain than most markets, foreign investors will see opportunities here that simply do not exist in the Middle East, South America or China. As we noted in other posts, New York is one of the markets that will still be a “must see” market. 

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