It makes more sense to rent than own your apartment in Manhattan. Here is more. So who buys? In about 20 percent of cases foreigners buy Manhattan properties. This is good as most of these units are not primary residences. However, foreign cash is likely to continue to push up sales prices and rents. Jonathan Miller put together an interesting series of graphs that highlight the relative value of currencies, and apparently buying with Euros is worth about a 25 percent discount and buying with pounds is worth about a 37 percent discount. To me this suggests that European money will flow into Manhattan real estate (a similar situation is happening in Miami) pushing prices higher. Even if oodles of new units are permitted and built I don't see much potential for rent relief for New Yorkers who want to live in Manhattan or the region. Substantial foreign cash will shift resources from oversees, not from elsewhere in the city. I remain skeptical that lower Manhattan can build it's way out of high rents because of induced demand. If the economy craters, then maybe.
I will be curious to see if foreign buyers start to buy in Brooklyn and Queens at the same rate they do in Manhattan. Are foreign buyers willing to trade transport costs for land costs with their second homes and pied-a-terres?