Brexit. What exactly does it mean? More importantly what does it mean for us here in New York City? The United Kingdom’s exit from the European Union caused immediate and drastic results. The British pound dropped and their Prime Minister resigned. Across the pond from them, we may be feeling the ripples.
The British Pound has dropped, giving Americans a better exchange rate. Americans can go over to the UK and get a better value for their dollar, while the British won’t be crowding our sidewalks as much. The United Kingdom sends more tourists to New York City than any other foreign country, according to NYC & Company, the city's official tourism bureau. They sent 1.2 million tourists here in 2015.
Foreign investors from countries such as China and Canada are now looking at New York City residential and commercial real estate. New York City now looks more stable and appealing to foreign investors. They are shifting from London and looking here instead. This will cause a higher demand but also may potentially drive up prices for local buyers. However, there still a surplus of luxury real estate that’s sitting on the market, so this may not affect it as strongly. It may be a slight uptick in demand. It’s a positive but it may not be the game changer for the market. It may be too soon to tell right now.
The Federal Reserve will keep interest rates low in response to Brexit. The UK leaving the EU creates global uncertainty and possible fear of a recession. Low interest rates mean cheap financing.
Buyers from the UK may not be able to buy real estate here because the exchange rate now that the pound has dropped. A weaker pound means UK buyers won’t be interested in purchasing here. So while things are shifting and moving around, one thing is clear. All eyes are on New York City now.