How the other .001 percent lives in the Middle East
By Edward Mermelstein
For the past two decades, an exorbitant amount of wealth has been created in the Middle East. In fact, it has been reported that in the first half of 2016, more than $10 billion flowed out of the region. The question is, where is all this money going?
London, where a large Middle Eastern population has been spending its money on homes and luxury goods, has recently lost its appeal, due to an increase in stamp duty and Brexit jitters. Wealth creation and resulting cross-border flows have continued to shape major real estate markets in the past year, with world wide security concerns, education and healthcare, becoming the market drivers across the globe.
Despite recent political issues driving investors to take a pause in potential investment in the U.S., there continues to be a strong dollar reinforcing the spending power of America’s wealthy, and persuading capital elsewhere in the world that it would be better off in U.S.-based income-producing investments.
While risk, risk, risk is the mantra of most political and economic analysts, the consensus is that during this time of uncertainty there is no better place to invest in other than in the U.S. markets. While New York has trailed London as the go-to city for Middle East investment and spending by almost 50 percent, we are starting to see a changing tide.
What distinguishes NYC from other metropolises is that it attracts wealth from all over the world. From real estate development to Wall Street, the area around Central Park is home to the wealthiest families on earth, where its not uncommon to rub sholders with the biggest movie stars as well as billionaires from all aronnd the world. Where else will you walk into a party and see Beyoncé, Prince AlWaleed and Donald Trump having a conversation? Perhaps this is why getting a second citizenship via the EB-5 program is all of a sudden in vogue.
The same investors that that have been flocking to buy in Mayfair or Knightsbridge are suddenly inquiring about that PH on Billionaire Row or Central Park South.
Edward Mermelstein is an international real estate lawyer