Cedric Cañas has been living the life of a handsomely paid expatriate for most of the past 12 years. The 33-year-old Spanish banker has spent time in both Boston and London, but it is New York City that he knows best, having first come to Manhattan in 1997. Cañas sold his one-bedroom Battery Park apartment at the end of 2005 when he was transferred to Madrid, but this winter he was sent back to the Big Apple, and he recently purchased a two-bedroom flat in Midtown for $1.3 million. Only this time around, Cañas intends to keep his New York property no matter where he goes next. New York City is one of the principal cities of the world for finance; people from all over the world are coming here, says the Harvard Business School graduate. At some point down the road, Ill probably be coming back to New York as well.
Cañas is a perfect example of the high-earning, globe-trotting cosmocrats who are driving housing prices skyward in the choicest world cities. From San Francisco and Seattle to Moscow and Shanghai, prices for prime residential property are surging, even as overall national numbers in some markets continue to be depressed amid worries of global recession and a real-estate bubble. The triumph of the glamour cities turns conventional wisdom on its head—for quite a while, experts including Yales Robert Shiller have been predicting that these cities, having been hyped the most, would likely fall farthest, fastest. The decoupling of national and local real-estate trends, which were once much more closely linked, reflects the lives of the new superprime property buyers themselves, roughly 50 percent of whom are expatriates, according to the global-property research firm Jones Lang LaSalle. While globalization has allowed money, but not necessarily people, to roam the world more freely, Cañas and his colleagues are an exception—they float on a cushion of international capital, largely immune to regional concerns, and are flush with cash.
Theyre getting even more flush. A second consecutive year of big bonuses for bankers and traders has helped reignite demand for residential property in coveted neighborhoods like Londons South Kensington and the Upper West Side of New York. Even outside these chief financial capitals, a decade of bull markets has swollen the ranks of the superrich so much that there is now a class of property buyer who can collect pied-Ã -terre apartments in Paris and Buenos Aires the way the merely wealthy collect cars or wine. With so much money in so many more peoples pockets, the demand for luxury housing in the most-sought-after cities has simply outstripped available supply, hence the eye-popping prices. This is especially true in the toniest quarters of these cities, where growth is often double or even triple the over-all city figures. Its quite an interesting irony that these buyers are globally footloose, says Sue Foxley, head of residential-property research at Jones Lang LaSalle, because there are probably only 100 streets around the world on their shopping list.
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