Luxury rents in some of world’s biggest cities are surging, pushed higher by limited supply, frustrated house hunters and residents who are returning after the pandemic.
Prime residential rents, defined ss the top 5 per cent of the market, rose 7.9 per cent year over year on average in the 12 months till September, according to real estate company knight frank, which tracks 10 global cities. In Singapore, prime rents were up 14.5 per cent compared to last year, while the gain was 11.2 per cent in London.
Sydney posted the biggest gain, as prices jumped 18.3 per cent amid housing construction constraints.Still, after the pandemic real estate frenzy, which pushed rent and home prices higher, there are some signs that things are cooling off for rentals.
Rent on prime properties in New York and Singapore respectively dropped 1.3 per cent and 1.7 per cent in the third quarter, according to knight frank. The company said it sees the rate of increases slowing globally in the coming months as well, as tenants reach their affordability limits.
“There comes a point when, even in markets with very strong demand and weak supply, tenants are unable to keep bidding rents substantially higher,” said Liam Bailey, Knight Frank’s global head of research.
