Demand for high-end real estate in Manhattan continues to stay strong, despite New York Mayor Zohran Mamdani’s proposed pied-à-terre tax that brokers said could cause a wealth flight, CNBC reported.
In fact, new data reveals that high-end real estate sales increased in Manhattan in the past month.
According to Olshan Realty, there were 133 contracts signed for apartments priced at $4 million or more between April 14 and May 10. That compares with 130 during the same period last year. Olshan noted that the total dollar volume rose by 10% to $1.12 billion.
Sales Remain Steady
CNBC reported that sales at the very high end remain especially strong, with contracts signed for apartments priced at $10 million or more surging by 80% to 34 contracts. CNBC said the market’s strength comes as real estate brokers and business leaders warn that a new second-home tax will chase away the New York wealthy and their valuable spending.
“The last four weeks demonstrates that an impending pied-à-terre tax has had no effect on the luxury market in Manhattan,” said Donna Olshan, President of Olshan Realty.
The high-end market could turn once the tax is imposed, CNBC noted, but said the surge comes as the proposed pied-à-terre tax makes its way through the New York legislature and sparks a highly public and bitter battle over taxing the wealthy in New York.
The pied-à-terre tax was first proposed by Mamdani and New York Gov. Kathy Hochul on April 15.
Non-Primary Real Estate
It would be an annual levy on non-primary real estate in New York valued at $5 million or more and the mayor said the tax will raise $500 million in annual revenue and force the part-time New Yorkers to “pay their fair share.”
CNBC noted that real estate brokers have lobbied in the state capital to halt the tax, saying it will hurt the market and cost jobs and tax revenue. Second-home owners in New York already pay property taxes but don’t typically use many public services such as schools or public transportation, CNBC noted.
Corcoran Group President and CEO Pamela Liebman told The Real Deal last week that the firm “has so many deals that have been put on pause, particularly at the $30 million, $40 million level, that are just wait and see.”
The battle over the pied-à-terre tax became highly personal after the mayor announced his proposal with a social media video in front of Citadel CEO Ken Griffin’s apartment building.
Griffin to Expand in Miami
Griffin lives in Miami and bought the apartment in 2019 for $238 million, setting the record for the most expensive home sold in the U.S., CNBC said. Citadel also is building a $6 billion new building on Park Avenue as well as a new headquarters in Miami, CNBC noted.
In an interview with CNBC last week, Griffin said he will expand the Miami workforce over the next 10 years “as an immediate and direct consequence of the mayor’s poor decision here, with respect to his posting of that video.”
