A luxury home in Tribeca that is being offered privately for rent at $175,000 a month.<\/p>\n
Credit: Laura Klein, Bespoke Real Estate<\/p>\n
A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer.\u00a0Sign up<\/a>\u00a0to receive future editions, straight to your inbox.<\/p>\n A surge in wealthy renters<\/a> is driving Manhattan rents to new records, according to brokers.<\/p>\n Median rents in Manhattan reached an all-time high of $5,000 a month in July, according to the Real Deal Report, authored by Jonathan Miller, director of markets for Street Matrix. The average rent jumped 15% compared with a year ago, to $6,306.<\/p>\n Wealthy renters are driving most of the growth. The average price for luxury rentals \u2014 the top 10% of the market \u2014 jumped 35% over the past year, to $17,464 a month, according to the Real Deal Report. Luxury rentals are now fetching an average of $121 per square foot.<\/p>\n Typically, renters are those who can’t yet afford to buy. In today’s market, ultra-wealthy New Yorkers who have plenty of cash to buy are choosing to rent. A record low supply of high-end properties for sale has led many to wait in a rental until they find their dream home. Others are spooked by falling or flat prices for Manhattan resales, which make apartments less attractive as investments.<\/p>\n “These are people who can easily afford $20 million, $50 million trophy homes,” said Laura Klein of Bespoke Real Estate, who recently brokered a rental for a penthouse in Chelsea for $177,000 a month. “There is so little inventory. And they don’t want to compromise.”<\/p>\n A luxury home in Tribeca that is being offered privately for rent at $175,000 a month.<\/p>\n Credit: Laura Klein, Bespoke Real Estate<\/p>\n Other brokers said New York’s new\u00a0pied-a-terre tax<\/a>\u00a0on high-value second homes has caused many wealthy would-be buyers to rent instead.<\/p>\n “The sharp increase in rentals following the pied-a-terre tax announcement suggests that some prospective purchasers may already be choosing flexibility over ownership,” said Pam Liebman, president and CEO of The Corcoran Group.<\/p>\n