Demand for top-tier Manhattan rental apartments fell in July as most wealthy families had already secured their vacation rentals in Big Apple, according to a Douglas Elliman report Thursday.
There were 59 new leases with a monthly rent of $15,000 or above signed in July, a 16.9% decrease from a year ago. The average rent of these leases slipped 0.5% year-over-year to $22,470 a month.
The median rent of the so-called super luxury rentals rose 1.3% to $20,000, meaning almost 30 Manhattan residences rented out for $20,000 and above in July, according to Jonathan Miller, chief executive of real estate appraisal firm Miller Samuel and author of the Douglas Elliman report.
The highest-priced lease was an apartment at 60 East 86th St., entering into contract for $60,000 a month in June, according to Mr. Miller and listing site StreetEasy.
At the price point of $10,000 and over, 163 leases were signed in July, falling 8.9% annually. The median rent of these leases remained flat at $13,500 a month, while the average rent fell 1.5% to $15,883 per month.
For the overall luxury Manhattan rental, which is defined as the top 10% priciest leases in July and has a threshold of $6,050, the number of leases was also unchanged from last year’s 615. However, the median rent dropped 3.5% year-over-year to $7,600 per month, while the average rent fell 3.9% to $9,594.
|Manhattan July Rental Market Snapshot|
|Price points||# of leases||Y-O-Y
|Source: Douglas Elliman, Miller Samuel|
Despite the price drops, the luxury rental market was largely resilient.
“So far this year, we have been seeing more activities in luxury rental market, as the sales market cools,” said Mr. Miller.
During the second quarter of this year, the number of luxury sales in Manhattan, also defined as the top 10% of the market, fell 16.8% annually to 263. The median price decreased 4.1% to $6.56 million, according to a Douglas Elliman report on Manhattan sales market released in early July.
The new tax law effective at the start of the year, which eliminates some tax advantages of owning property, including capping property tax deduction and new mortgage interest deductions, turned potential buyers into renters, Mr. Miller said.