The rental market in Manhattan is showing a surprising trend. Despite rents increasing to record rates, the high-end rental market in Manhattan is still expanding. Clearly, high-net-worth individuals prefer signing a lease agreement as opposed to taking out a mortgage to purchase a luxury apartment in Manhattan, but why would they when the financial benefits are few? Apparently, the appeal of the Manhattan luxury rental still exists for individuals needing a place to live without having to absolutely settle down into a long-term residence. Although many residents in this category may very well be able to afford buying a Manhattan condo, it seems that the current state of the housing market coupled with a sense of uncertainty on the future is keeping their faith in the rental market alive.An interesting force behind this trend is the growing existence of rental properties that simply would never have been available in the past. According to Business Insider, with the economy in its present state, many homeowners are holding onto their properties for longer than intended while waiting for the market to recover. In the meantime, they’re renting out these usually unavailable and fully occupied luxury properties. Furthermore, for many high-income individuals in Manhattan, luxury apartments can be rented without any sacrifice in the standard of living and without having to deal with the hassle of maintaining the property themselves. In this case, paying a premium for maintenance in addition to rent is highly preferable. In short, the mental attitudes of these high-income individuals simply aren’t leaning towards buying Manhattan apartments.
With a near-guarantee that mortgage rates will remain low over the next few years, NYC residents don’t feel that it's necessary or urgent to make a purchase. With the looming economic crisis, even high-income individuals aren’t completely willing to spend large amounts of money on buying property and thus gambling on an unstable economy. By renting a Manhattan apartment, one can first test the waters of a neighborhood and a property, reserving a final decision for a time when the market may once more be on the upswing.
