New York's plummeting real estate sales cost city US$1.2b

New York

THE novel coronavirus pandemic's slowdown in real estate deals has cost New York City a whopping US$1.2 billion in lost revenue so far this year.

Sales of commercial and residential properties - everything from office buildings to hotels and condo units - are down 49 per cent this year through November, according to a report released on Thursday by the Real Estate Board of New York. That has led to a 42 per cent decline in city tax revenue, compared with the same 11-month period in 2019, the trade group said.

The money comes from a long list of levies that each transaction generates. A dearth of deals means fewer collections of transfer and mansion taxes, and less income from newly recorded mortgages.

Real estate investors are taking a pause amid a pandemic that's reordered how and where New Yorkers live and work - and, in turn, undermined property values.

The pullback has dealt a crippling blow to the city's economy, which relied on the real estate industry for 53 per cent of its annual tax revenue in the last fiscal year, the real estate group said.

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While the arrival of Covid-19 vaccines offer some optimism, "New York's economic crisis grows", James Whelan, the group's president, said in a statement.

"From rental assistance and unemployment benefits to state and local aid, New York needs federal relief," he added. BLOOMBERG