A common argument against new housing supply is that in high-cost cities such as New York, demand from foreign buyers is so overwhelming as to make new supply irrelevant. A recent study (available here) by two business school professors suggests otherwise. The study does show more foreign involvement in the NYC market than I expected: just over 13 percent of Manhattan buyers, and 5 percent of all regional buyers, come from outside metropolitan New York. Even this share is less than in some lower-cost markets: the study notes that 17 percent of Las Vegas buyers are from outside the city.
However, the impact of “out of town” buyers is pretty small: the authors conclude that out-of-town buyers “cause an increase in house prices of 1.1% and an 39 increase in rents by 1.6% in both zones.”