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Over the past three years, prime global rental markets have experienced one of their strongest booms on record, with a perfect storm of low existing supply reinforced by low new-build completions meeting strong renewed demand supported by healthy labour markets.
Rents, which were running at four times their long-term rate a year ago, are now running at ‘only’ double that rate. However, the direction of travel is clear – expect rental markets to normalize over the rest of 2024.
The 10 cities covered by the Prime Global Rental Index saw luxury rental values rise by an average of 5.2% in the year to December. This rate is down from the 8.1% seen in Q2 and is the lowest level observed since 2021 Q3, alth Prime Global Rental Index ough rents are still rising above their long-term pre-pandemic trend rate.
On a quarterly basis, average rental growth actually declined by -0.6%, providing some relief for tenants. This marks the first quarterly fall observed since Q1 2021.
