A report from Bloomberg on New York. “In pricey Manhattan, having a roommate or two is a traditional rite of passage. Now, as the city empties out and rents plummet, even recent college graduates are finding they can afford to live solo. In October, Manhattan studio rents tumbled 17 per cent from a year earlier to a median of $2,245 – the lowest since 2011, data from appraiser Miller Samuel Inc. and Douglas Elliman Real Estate show. Incentives such as free months and payment of brokers’ fees brought the median down even further, to $2,069.”
“‘I honestly never thought I was going to be able to afford a studio or one-bedroom apartment until, maybe, my late 20s,’ said Ines Montfajon, 23, who’s relocating from a Greenwich Village share to a Lower East Side studio for about $100 more a month than she currently pays. Montfajon negotiated the asking rent down to to $1,700, then when she said she’d rather pay $1,685, the landlord’s broker, eager to close the deal in lean times, personally paid her the difference for the entire 15-month lease, she said.”
The San Francisco Chronicle in California. “Apartment vacancy rates have more than doubled since last year in the San Francisco rental market, as many tenants have deserted the market during the coronavirus pandemic. Not only do renters suddenly have more options, but the spike in supply has caused prices to plummet and put them in a rare position of power in the historically competitive market, analysts say.”
“‘For the first time in a long time, they hold some leverage in the market,’ said Rob Warnock, a research associate at listings service Apartment List. ‘With more options to choose from, they can be more selective and they have more opportunities to negotiate their rent payments, knowing landlords have a greater-than-usual number of vacancies to fill.’”
From Socket Site in California. “With the average asking rent for a studio apartment in San Francisco having slipped below $2,000 a month for the first time in nearly a decade earlier this month, the average asking rent for a one-bedroom apartment in the city has since slipped under $2,700 a month for the first time since 2012. As such, the average asking rent for a one-bedroom in San Francisco has dropped nearly 25 percent since the end of February and is down around 27 percent from the local market’s peak in 2015, driven by a sharp increase in vacancy rates (which continue to climb).”
“The weighted average asking rent for an average apartment in the city has slipped under $3,200 a month, is down 23 percent over the past eight months, and is 29 percent below its 2015-era peak, with over 3 times as many apartments currently listed for rent in San Francisco than at the same time last year.”
The Washington Post. “The District’s rental market has suffered in recent months, with a recent report from Apartment List, showing median rents are down 10.7 percent in the city since the pandemic started.”
From Blog TO in Canada. “Last month, the average rent for all residential property types in Toronto proper hit $2,150 — an astounding 17.1 per cent drop from Oct. 2019 — according to data from Rentals.ca and Bullpen Research & Consulting’s latest Toronto GTA Rent Report. With Toronto’s huge decrease, it all averaged out to a 13 per cent reduction in rents across the board in the GTA overall, down for the 11th straight month to $2,122. Rents for condo units in particular are plummeting the most significantly in the region, as are prices to actually purchase them, especially small-square-footage ‘micro-condos’ in the downtown core.”
The Vancouver Sun in Canada. “People are leaving the cores of major cities, including Vancouver, and that has led to some rent drops. The average monthly rent in Vancouver in October for a two-bedroom apartment was the highest in Canada at $2,712, but it was an eight per cent drop from a year earlier, the steepest fall in B.C. The report said it’s based on looking at ‘asking rents,’ which can hide even larger drops in rents. ‘When conditions are poor, landlords will often accept rents below their asking rent rate or offer incentives like one or two months of free rent,’ said Paul Danison, content director at Rentals.ca. ‘Vancouver rents are down year-over-year, which suggests a higher vacancy rate.’”
“He said another indication of a rising vacancy rate is that many landlords are offering incentives to renters in downtown Vancouver and the West End, with some offering one or two months of free rent.”
The Property Reporter on the UK. “Newly released data from Home.co.uk has revealed that renters are quitting London and heading out of the city. The study found a dramatic increase of 68% in the monthly supply of homes to rent in the capital region compared to a year ago, as tenants fail to renew tenancies. The current average rent in Greater London remains a hefty £2,127 a month, but this is down a massive 11.2% over the year. The bulk of this fall (10.5%) occurred in the last six months.”
“In the worst-hit boroughs, landlords have dropped their rents by more than double the London-wide average fall in rental value. Over the last year, rents have fallen in the City of London by 28.8%, in Hammersmith and Fulham by 23.5% and in Kensington and Chelsea by 22.5%.”
From Gulf News on Dubai. “In more recent times Jumeirah has faced growing competition from new villa communities such as Arabian Ranches and Emirates Living which offered a mix of affordable townhouses and large independent villas with well managed community facilities. As the city has grown out in to the desert and the supply of new villas increased, rents in the area have dropped approximately 50 per cent from their height.”
From Money Web on South Africa. “Rental price growth hit a fresh all-time low for the second consecutive quarter in Q3, according to the PayProp Rental Index, the lowest since the index was launched in 2012. It is likely this is the lowest in over a decade, with the aftermath of the global financial crisis in 2009 likely the previous low point. PayProp also highlights the fact that ‘the market has essentially been flooded with supply’ because of the ‘many short-term lets reallocated to the long-term rental market [to avoid standing empty while travel restrictions were in place].’ This has added ‘to existing downward pressure on rental growth.’”
“PayProp points to a potentially ‘dire effect’ of the current rental market on estate agencies. These businesses are caught between low rental growth and elevated arrears, which will impact their cashflow. PayProp says while arrears have peaked, rental growth is likely to remain subdued: ‘We don’t foresee a recovery anytime soon – in fact, it is possible that we will see even lower rates in Q4 this year.’”
The Australian Financial Review. “The pandemic hasn’t quite killed off short-term holiday letting but it’s certainly given it a hearty twist. According to a report in Domain, apartments in Sydney’s very central Millers Point have seen rents drop by more than 25 per cent due to falling demand. This is probably due to recession-hit families bunkering down together, while former short-term holiday rental flats flood the market. In Melbourne, according to figures released by SQM Research, the drop has been less dramatic with the average asking rent for all units down 9 per cent, from a record of $424 a week in March to $386 this month.”
“The fact that tenants are leveraging empty flats to get lower rents in our city centres, confirms the central thesis of a new book by two American academics. ‘Airbnb, short-term rentals and the future of housing’ examines the effect of holiday lets on rental communities globally. It has a whole section devoted to Australia, claiming we are one of the least regulated countries in the world when it comes to short-term holiday lettings.”
“The authors argue that the most disruptive impact of Airbnb and short-term rentals has been in urban centres where housing markets are stressed, exacerbated by Airbnb’s tight control over access to critical data. That’s as may be, but raw data can only tell you so much. As city-centre rents plummet, we are reminded that PR talks but money walks.”
From CBD News in Australia. “Living and working in the CBD has been difficult since the pandemic began and no clear picture of the future has yet emerged. Flinders Lane agent Dionne Wilson, of Harcourts, has a heritage apartment for sale in the old Masonic Lodge on Flinders St. The two-bedroom apartment is on the market for $650,000 and she hopes it has held its price. ‘I won’t lie,’ she said. ‘We have a 30 per cent vacancy rate in the CBD. I expect other agents are in the same boat. It’s been a difficult time.’”
“Renters are benefitting by an estimated 20 to 25 per cent drop in rents. Many are renegotiating their leases based on the rentals being asked for empty apartments in their buildings. The vendor of the Masonic Lodge property previously rented it to visitors through Airbnb but this was banned during the COVID crisis. She had four other CBD apartments on the books and ran them as a business. ‘Now she’s got a fulltime job,’ Dionne said. ‘She’s selling kitchens.’”