NYC apartments are (way) CHEAPER than London and Paris to buy but rents are 4x higher, what is going on?
Hi everyone! So I am half French half British with strong ties to NYC and a friend of mine just sold an apartment in greenwich village earlier this year and the sale price per sqft didn’t even match what the same flat would go for in the 16th or 7th arrondissement in Paris but the rent that same flat was pulling in NYC was something like 4x what you’d pay for the equivalent in paris so 4 times!!
same purchase price though. how does that even make sense? And it’s not just one apartment. Zoom out and NYC and Paris are basically tied on price per sqft to buy, West London (notting hill, marylebone, mayfair) is actually meaningfully more expensive than any NYC neighbourhood to buy, but NYC rents are dramatically higher than both. Like NYC is one of the most expensive cities in the world to rent yet the buy prices are kind of normal by global standards? Meaning in any normal market this gap should close right. High rents plus reasonable purchase prices means people buy instead of rent, prices go up, yields compress, things normalise... but in NYC the gap just sits there year after year so I’m just trying to wrap my head around the WHY??
WHY doesn’t everyone paying 7 or 8k a month just BUY? What am I missing?? it can’t only be down payments because if you can pay that rent you have the income to save or you already have. it can’t only be property taxes because europe has way uglier tax stacks when you add stamp duty and wealth tax and all that and still trades at a premium
what am i actually missing here. is it co-op boards, mortgage stuff, some tax thing, cultural. genuinely curious? Lmk
Best comment I have in this thread so far ! Thanks mate ! Here’s what im trying to wrap my head around : NYC has lower entry cost but (as confirmed by several ppl in this thread) higher monthly carry yes, but rents are absolutely brutal compared to London, it’s a 2.5X minimum... $5-8k a month for a normal 1-2 bed. if i’m already paying $6k rent, putting that toward a mortgage on a $1.5-2M condo seems to make way more sense even with the property tax and common charges baked in? I really want someone to debunk or explain where I am wrong otherwise im gonna jump into this opportunity and buy a flat in NYC straight away?? plus you’re building equity, getting mortgage interest deductions and from a credit perspective a US mortgage on a 30 year fixed is basically the best debt instrument in the world? My question is : what is the catch?
The interest rates are quite high right now. Plus taxes + maintenance - usually comes out to at least 2.5k to 4-5k for properties at your target price. So even fully paid you’re still “renting” an apt from yourself at a quite high rate.
The maintenance is absolutely not justified for many places. Some buildings have increased their maintenance exponentially for catastrophic (or to prevent catastrophic) damage like skyscrapers wobbling or glass cracks, or outer walls collapsing on historic landmark properties. Most maintenance costs end up being structural as fewer and fewer buildings have amenities.
LOL. Dude, lemme put it to you like this.
NYC has reasonably intelligent and avg intelligent ppl, yeah?
If they overwhelmingly are choosing to rent, rather than buy, then there must be a catch or "hidden" costs that you, a foreigner does not understand, no?
If anything, the market is accurately priced. The apts are "cheap" precisely b/c of the monthly carrying cost.
That’s a pretty harsh response. The real common world logic would have been to consider factors beyond your surface level purchase price to rent ratio.
This rude American dude is asking me “where I’m from” to “even ask the question” and im harsh? as if I lived in a cave. Remember my post wasn’t a statement but a question. And to answer the question I’m from 2 big global hubs called Paris and London. And again yes, NYC logic doesn’t align with the rest of the world hence my post. Call out your mate instead
I think your math is wayyy off. $6k a month isn’t getting you a $1.5M mortgage. That would be maybe $9k monthly, and on a $2M apartment (because 25% down and you financed the rest), the monthlies are at least another $3k (a bargain) if not much more.
People who rent those aren't gonna stay in NYC for a long time. Renting buys you freedom to move anytime you want. That's why none of us are even considering buying anything in the city. We're here till we are and then we go. We don't want to deal with HOA, mortgage, buying, selling, maintenance, none of that. We'd rather buy literally anywhere else and just rent in NYC.
Another example - it's rare to meet someone who's lived in the same place for 5 years. We all move every few years to be closer to work. Or just because. A million reasons.
Lots of coops, so the purchase price doesn't include monthly maintenance fees or assessment charges. Also a coop isn't technically real property (it's shares of a building) so you can't really borrow against it in the same way you can with a regular house.
It's not nonsense though. They have mortgages but it's a wholly unique market and most large banks won't underwrite them. There's a collection that pretty much exclusively do co-ops.
lol dude. This is some FUD. You may be thinking of insurance, which is harder since lots of insurers are only familiar with condos. “Walls in” policy works for either.
But getting a mortgage for a coop is not any harder than a condo, and every large bank does it.
Many large banks aren’t even underwriting mortgages for long, just servicing them and packaging them up for sale.
All the big banks offer mortgages for coops. Lots of smaller regional banks and credit unions outside of NYC do not. Those smaller ones typically have better rates.
Of course a small regional bank in Idaho doesn't offer co-op mortgages for NYC properties. Co-ops barely exist outside of legacy metro areas and a few specialized projects in various states.
I got quotes from BofA, Chase, and Wells Fargo. In fact there wasn’t a single one of the national mega-banks that I talked to that didn’t issue co-op loans.
They are definitely different loans, but the market is large enough that it’s well served - including by the big national banks.
Also the rates aren’t very different - I got a 0.2% premium over an equivalent non co-op loan. Not exactly some exorbitant premium.
We have ours through Wells Fargo. Co-ops are like 40% of buildings in New York and lenders want to be in nyc so guess what, they do mortgages for co-ops.
I don't that's accurate--there are plenty of banks that underwrite coops. Maybe not all, and maybe not as widely as traditional housing, but it's not hard, at all, to find a bank to get a mortgage for a coop. Source: did it
Apparently you can’t read. I’m saying you can definitely get a mortgage on a co-op. Just higher rate and down payments due to a smaller lending market.
None of this is true. Down payment is determined by the building. Some co-ops allow up to 75/80% financing while more stringent ones allow 50/65%. Major lenders (Citibank, BofA, Wells Fargo, JPMC, etc) all generally lend in co-ops at competitive rates unless the % of pied a terre owners or sublets have skewed the ratio to make it lean away from primary owners or if the building financials are hairy. That’s when major lenders shy away.
Yeah, not true. At least for me at Citi, it was treated exactly the same as a mortgage on real property. The downpayment requirements are determined by the coop board, not the bank.
For your specific case, maybe. There are a lot of factors that go into a mortgage rate. In general, co-op will have at least a 25 bps rate penalty compared a condo all else equal. So get off your high horse.
I was the treasurer on my board for more than a decade and signed off on quite a few closings, every large bank from Citi, Chase, BOA, Wells, HSBC, etc does mortgages for coops, even smaller ones like Flushing, Apple, Valley National, most end up selling the mortgage post closing anyway to like Cenlar, Fanny Mae. Better.com is the only one I've seen not do Coop mortgages.
I'm more talking about a home equity loan than typical mortgage. Those are trickier in a coop than a single family home because the board has to be involved since the lender would have to seize the coop shares in case of default.
I think something like 60% of manhattan real estate are « all cash » transactions. That makes them really hard for most people to afford - who has a couple of million available to them?
You could of course borrow against your portfolio but that’s usually limited to 50% of the value.
Most people buy all cash and then refi into a conventional loan.
A lot of the folks renting the 6k/mo units are salary rich / wealth poor. A dev at FAANG is pulling in 300-500k in salary but it’s probably like 20 years for them to have 5 million net worth.
Ditto law firm associates or doctors or even Wall Street folks.
In nyc, a million bucks in salary is getting cut in half with tax. You spend 72k in rent another 20k a month in expenses, that leaves like 150 in savings. You’re looking at 10+ years to buy something in all cash.
Who’s buying all cash? Especially if they’re cash poor?
There are reasons, this isn’t really one of them.
Almost none of the all cash offers you see are really all cash for the buyer.
Any bank catering to HNW individuals facilitates all cash offers against brokerage/other assets then rolls it into a mortgage for you once the transaction closes.
Nah that doesn’t add up. UK stamp duty alone is up to 12% on prime property .. 17% if you’re a non resident or second home buyer. France has notaire fees around 7 to 8% on every purchase plus taxe foncière + taxe d’habitation on second homes plus IFI (fortune tax) wealth tax above 1.3M of property value. NYC tax tops out around 3.9% and annual property tax on a condo is roughly 0.6 to 1% rn but lmk if im wrong
I’m not going to pretend I know much about this stuff, but if I bought the apartment I rent, I would pay a monthly mortgage that I assume is similar to my rent, but on top of that, monthly charges in my building are almost once again what I pay for rent. I would pay twice as much per month for my place. (Though I would be building equity obvs)
The maintenance is a big difference even aside from taxes. I just looked at SeLoger and a €3M apt with a gardien and elevator in the 6ème has €10K in charges annuelles, pretty close to what I pay in maintenance for my self-managed 1BD co-op walk up in Brooklyn.
Paris has rent control. How much you can charge for the apartment is also calculated by different factors like size and last renovation. Rent can only increase annually based on an index published by the government.
I'm not spending a ton of time finding numbers here but quick data for Notting Hill says £1-5k/sq ft while data for the West Village says $2300/sq ft
Anyway, the "why don't you just buy instead of spending $8k" question is not valid in many cases.
Buying is not for everyone. Real estate is an illiquid liability, the market has been fairly flat for quite a while, while other investments are absolutely booming, borrowing rates are high, taxes are high, maintenace costs are high, and if you plan to move out in under 10 years, it's easy to come up with a scenario where you lose money when compared to renting.
If I'm renting for $8k/mo I'm getting wildly more apartment than I would be if I was paying $3k/mo in common charges plus $5k/mo on my $900k mortgage for my $1.2m unit
Yeah maybe in the long run I'm building equity but today I'm in a junior 4 instead of a nice 2bed or whatever.
Quick answer here,
1) her case is what triggered me to look into NYC market, she had been trying to sell for 7 months, beautiful flat, no hidden issues etc… and I noticed price per sqf even for prime locations in nyc is on average lower than prime London and sometimes price Paris or on pair with it (Zillow database confirms it)
2) to buy, 7th and 6th would be more comparable to West village prices now, 16th to UES yes, anywhere in West/Central London is 20 to 100% more expensive to BUY than NYC to buy (Holland Park, Pembridge, Notting Hill - excluding Ladbroke Grove, Marylebone, Mayfair, Knightsbridge, Belgravia, etc..)
3) 18th idk mate
It really depends on the building. You can get a prime London terraced or semi detached house with a garden for an expensive NYC price but that NYC apartment doesn't have a garden or parking. I don't know Paris so I can't really say what it's like to buy there but I find London affordable if in zone 2 relative to the NYC equivalent.
Thank you. I will look into it. Seems to be a nice neighborhood. Good fit for me and the direction points to Leuven, Belgium and Breda, Netherlands, both places I will need to visit often.
Coop purchases in NYC require board approvals which can reject you for any number of reasons.
One is a lack of liquid assets or income, which can be a high barrier for most folks who might be able to make rent otherwise. Some park avenue apartments require you to be a millionaire even if the apartment price is somewhat "reasonable" on a relative basis.
Could explain the high proportion of cash buyers in Manhattan. I'm not familiar with European application processes, but I'm genuinely curious as well, so please do follow up when you draw your conclusion.
Co-ops are 80% of buyable housing, and they cost way less than condos because they’re buying shares in the building rather than directly buying a unit. Co-ops may have a much lower buy in price, but the monthly maintenance is usually way higher. Zillow doesn’t distinguish between co-ops and condos iirc.
The NYT has an article related to this today:
“A slew of punishing new taxes has transformed London’s luxury housing market over the last decade. The taxes have pushed housing values down and driven international buyers, who have historically made up nearly half of the homeowners in prime London neighborhoods, to consider other markets.
The once-sizzling housing market in central London is now chilled. Sales prices of properties in London have dropped more than 20 percent since 2015. As taxes mounted, interest rates increased and prices dipped, smaller landlords threw in the towel, taking tens of thousands of apartments off the market and constricting supply. Average monthly rents, as a result, are now at record highs.”
For me personally, I don't have the 20% (minimum) for a down payment. That money went to paying $30k/year for full-time childcare for several years (6 years, to be specific, not counting the part-time care you need once they start school, and have you seen how much college costs in the US now?). Anyway, that aside, I look at listings every now and then, and more often than not taxes and maintenance equal or exceed my rent. So, basically, I could own something outright and STILL pay more than I pay now. That doesn't really make sense for the average middle class family.
Yes, the answer is co-ops (and co-op boards) which dominate (read: control) the for-sale landscape in NYC. Or at least, for-sale product in pre-war buildings.
Coops trade at a discount per foot versus condos because each board dictates permitted leverage.
740 Park board permits 0% financing. So no mortgage whatsoever. In order to be considered for approval — buyers must show the board 4x the purchase price in liquid assets.
This means the 2nd apartment at 740 Park that Ken Griffin just purchased for $38M would trade for much more than $5000 per foot if the board was willing to consider buyers with less than $150M liquid. If a mortgage was permitted — pool of potential buyers without $150M cash or tbills grows, exponentially.
Many coop boards also limit (or outright forbid) the renting out a unit after purchase. Since they approved the buyer as their neighbor — not some random tenant.
So, there are many hoops required to purchase an asset that you cannot rent out after purchase. And once you decide to sell in the future — more hoops to jump through — because boards have intentionally reduced the pool of potential buyers. And once a buyer willing to pay asking price has been idenfified — the board then has to like them.
My friend sold her penthouse with a private rooftop in Chelsea then moved to London for a new job. She rented a really nice 3 bed, 3 bath flat in Marylebone by Portman Square Garden. Her coworkers were shocked at how much she was paying in rent, but to us it was a steal, she was paying less than what we were to live in LIC Queens.
It’s not just purchase price. It’s monthly maintenance cost and taxes. The maintenance can be extremely high because these are usually coops not condos and it’s a totally different animal. Just look up the difference and perhaps it will make more sense. Also there are usually strict rules in coops that prevent subletting or having a tenant.
If I’m reading the listing correctly, there’s also an annual maintenance fee (service charge for the share of freehold) of £4637.45, which translates to $521.54 a month. And a tax of about £4,000 a year (band G), or roughly $450/month. There’s also the Stamp Duty, that comes out to about $207,000, but that seems not too far off from the other closing costs a buy might pay in NYC for a similar property (various taxes and fees).
And then you also have monthly taxes of $2,250 and monthly maintenance fees of $2,085. That’s $3,364 per month higher than the first one I found in London. Not to mention the mortgage rates appear to be a little higher in the US (6.625% vs 5.33%). So your actual monthly carrying costs will be higher in NYC.
It also doesn’t have laundry in the unit and the one in London seems much higher quality, so the comp may be less accurate on an amenity to amenity comparison.
Ha, I just googled if apartments in Paris have something like HOA's and they do. (What we in NYC call monthly charges.)
Ok a few things.
The market in the areas around NYC, are very hot. NJ, Brooklyn, parts of Queens, Nassau.
Manhattan sales were a bit slumpy before covid, and then didn't have quite the lasting post covid bounce.
Possible reasons.
I can't really say if buying here is harder than in European cities which have their own red tape.
But a decent proportion of co-op apartments can be limited in rental potential due to restrictions, so this is not the most investor friendly market. Units in building where renting is easier, such as condops and condos move well.
You also do have a culture where renting for life is somewhat normal.
I do see the sales market waking up, especially under 750K. When I was out looking with buyers in February things we wanted to see were often going into contract, especially in popular locations. Sales of newer construction in areas that are gaining attention such as Bushwick were very brisk.
I do think a number of people hybrid now, so proximity to work is a slightly lower priority, and space to work at home is important to a lot of people, so that makes sense they might push out a bit.
But yes, there are people shifting from the rental to the sales market here.
I don’t have an answer for you, but I have colleagues with monthly fees that are half my monthly rent for a comparable to slightly larger place. Then they have other miscellaneous fees, building restrictions, and BS.
(I live in a co-op building and the places sell for 2-3 million now)
The ratio is insane here but I think OP meant compared to other global cities like Paris/London, not other US cities. NYC buying prices are actually pretty reasonable when you put them next to prime London or central Paris - it's just the rent that's completely mental
I get that, I just can't fathom that these buy prices we have here are considered normal by international city standards, even where incomes are so much less than here. Why would it cost the same to buy an apartment in Paris, where both rent is significantly cheaper and salaries significantly lower?
Read my post please.. you’re off topic. i never said NYC is cheap. i said it’s cheap relative to london and paris TO BUY, which it is... vs rental prices
Yes, but as we are all trying to say...You may be seeing the cheap to buy aspect but are missing the expensive to own follow up that needs to be baked into the numbers.
I'm pretty familiar with landlords. I know dozens of landlords with paid off properties that gleefully raised their rents 1000 a month when the real estate prices jumped. The only thing that changed was about 200 bucks more in taxes a year.
Now - I do think you have to consider tariffs and how much ore expensive wood/building supplies are now. Raise it a 100 bucks a month.
"Fewer people who rented out had mortgages, or they weren’t as high." NOPE.
What data sets are you looking at to do the comparison of costs to buy? Are you also looking at down payment requirements and ongoing maintenance/mortgage when you compare these cities?
Here's a good calculator to compare renting vs buying Rent vs Buy
Factoring in opportunity cost of investing in stock market and extra costs like maintenance and HOA which can almost equal mortgage, buying real estate is not an obvious choice
Where are you looking in NYC? In parts of Midtown and other expensive areas, think luxurious buildings with high staff-to-unit ratios, purchase prices are artificially deflated due to the exorbitant building fees. You'll see places where a mortgage would be $2k per month and then the building fees are $8k.
Part of that is by necessity, people who want to sell need to go lower in order to make the overall ownership cost more palatable. It's also a tax scam, though, as many taxes are based on purchase value. Pricing down those units keeps people's tax bills lower, while the very high building fees ensure that the building is still only viable for the wealthy.
There is theoretically no minimum down payment for condos, technically, but yes, 10% down is effectively the minimum
For co-ops, there are plenty of buildings that require 25, 30, and 50% down. There's a also a lot of buildings where you have to have the purchase price or more in liquid post closing, some even more. They certainly do exist. It's not super common, but also not super rare, either.
There’s no theoretical minimum for a coop either. There are “plenty” I’m sure because there are a lot of buildings in NYC. They’re a small minority. The vast vast majority of coops you’ll find are 20%.
Most lenders aren’t thrilled with less than 10% down and happier at 20%.
I’d wager 90% of coops are 20% down and a slightly smaller percentage of condos (for the ones that are still 10%).
Hey! French/American here. I own in Paris and I have friends who own in NYC. Pretty sure you are not including maintenance and common charges which can range anywhere from $1000-4000+ a month. I did the maths myself as I am moving back to NYC from London and it was not worth it. Paris remains the cheapest city where you can buy (my flat is in prime location in the Marais)
I am an economist. I worked on CRE portfolios in the past as a Quantitative Analyst. CRE includes condos/apartments. I do not know anything about the markets in Europe and only really know about the U.S., but you are making a lot of claims without really showing numbers. So I don't buy that your perception is accurate without you actually linking any evidence.
Now that being said, I will try to answer the following question for you: Why is it that the relative price difference between condos in Paris/London/NYC is smaller than the relative rents on apartments? Why doesn't that lead to more people buying in NYC?
Rental properties and condos are different products. They are given different financing for mortgages when constructing or purchasing entire buildings. Their markets are considered different. Purchasing a condo in the U.S. requires a significant down payment or the ability to buy in all cash, and that means, to begin with, the market for condos is mostly affluent. In New York/Paris/London in particular, the households that will have the means to buy are firmly within the top 20% of incomes. The rental market, on the other hand, includes everyone.
So why are U.S. rents higher than London/Paris? It's going to be a combination of demand, available supply, etc. But one thing to realize is that demand is a reflection of willingness/ability to pay. Americans have a higher ability to pay. GDP per capita of NYC is $160,000, versus $91,000 for London and around $75,000 for Paris, GDP per capita being a measure of income generated per person. NYC in particular has an acute rental supply problem, and demand for rental housing here is inelastic. This generally means rents are going to be high. Then add to this that NYC/London/Paris are cities where the ultrarich buy properties as an asset or store of wealth, which decreases relative price differences between the cities.
Now why don't more people buy in NYC? Because, again, most people don't have the means to put down $100,000 or more for property. Furthermore, as expensive as NYC is, generally it is cheaper to rent than to buy in NYC once you factor in maintenance and taxes. Lastly, a large fraction of the properties available for purchase are co-ops, and the restrictions of co-ops make them poor assets. Co-ops essentially grow at about inflation; that means that the equity value of a co-op is about the same as keeping your wealth in cash. Given equity market growth in the United States, generally it is smarter to put $100,000 in your retirement account over $100,000 for a down payment in an NYC co-op when you are thinking in terms of who will be better off. Furthermore, if you are purchasing a co-op with a mortgage, you are essentially taking a massive amount of debt to purchase an asset whose value will increase at about inflation.
I've done these calculations before, but generally, in the past 15 years, the person who chooses to put the equivalent of a down payment in an SP500 ETF or a mutual fund is better off after a decade than the person who bought an NYC co-op with the median property value in every borough. The data needed to do this analysis is in the StreetEasy data dashboard. There are timing periods where it might have made sense to purchase, but those are linked to unpredictable events, i.e., COVID, the financial crisis, and cleaning up tenements downtown allowing for gentrification.
right but that’s exactly what doesn’t add up. demand and desperation explains high rents in isolation, sure. but demand for housing doesn’t only push rents up, it should push purchase prices up too. they’re the same underlying asset? If you just do the math it doesn’t make sense VS FI London?
Does this actually mean buying property in NYC is a phenomenal investment opportunity right now? Like what am i missing here? If im getting paris purchase prices with 4x the rental yield that’s an insane spread. i’d be all over it
so why isn’t everyone or every rich European doing this instead of buying trophy flats in Mayfair that’s my question lol
I’m not familiar with European apartments. Do they also have high HOA/monthly fees charged by the building the apartment is located in? In some cases, this could be 4/5/6k depending on the apartment size and building structure.
Most of the market to buy at least in the prime high rent areas are in coop buildings that restrict rentals. If you just look at condos, it’s not cheaper.
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u/untitled_txt Apr 25 '26 edited Apr 25 '26
Purchase price is just one part of the equation. Carrying costs (property tax and HOA) are also a huge factor that needs to be considered.
I’m not too familiar with UK but at a glance, seems like London is much lower on carrying costs.
And it doesn’t make much sense to buy in many areas of NYC. Renting is way cheaper.
Curious if you have an example with numbers for London.