In some of the world’s major cities, luxury apartment rents are experiencing a notable increase, driven by factors such as limited supply, frustrated house hunters, and the return of residents following the pandemic.
Published on Thu, Nov 16, 2023, and updated on Fri, Nov 17, 2023, this trend is particularly evident in Singapore, where prime rents have risen by 14.5% compared to the previous year. The surge is also notable in London, with an 11.2% increase. According to Knight Frank, a leading real estate company tracking 10 global cities, prime residential rents, representing the top 5% of the market, saw an average year-over-year rise of 7.9% in the 12 months leading up to September.
Sydney stands out with the most significant gain, witnessing an 18.3% surge in prices due to housing construction constraints. However, there are indications that the post-pandemic real estate frenzy, which propelled both rent and home prices higher, may be stabilizing.
Knight Frank reports a 1.3% and 1.7% drop in rent for prime properties in New York and Singapore, respectively, during the third quarter. The company anticipates a global slowdown in the rate of rent increases in the coming months as tenants approach their affordability limits.
Liam Bailey, Knight Frank’s Global Head of Research, commented, “There will be a point in the markets whereby tenants are unable to keep bidding rents substantially higher despite strong demand and weak supply.”
