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The NYT has a powerful calculator that lets one determine whether buying is better than rent. For people who are uncertain of whether they will be in the location for more than a few years, and who can earn a high return investing in stocks or other assets, then renting is by far the smartest decision.
Also, the calculator lets one input the monthly common fees that condos add on. In New York City, those are many thousands per month, further driving the equation to favor renting.
Owning is a good investment if one can pay cash for an apartment, then rent it out as an investment. The difference between the rent and monthly fees is a nice annuity. But again, the rate of return is low, and other forms of investing can yield more.
In summary, buying expensive apartments in Manhattan is for suckers, in most cases. So, why do people do it?
In many cases, the luxury apartment is just a way for foreigners to park their cash. Real estate is a new currency that is fairly liquid.