Luxury Apartment Boom To Slow As A Wave Of New Supply Hits The Market
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Experts predict the luxury apartment boom, which lasted some seven years and pushed rents up more than 26% since 2010, may come to a halt this year.
The slowdown is being driven by a wave of new apartment supply, not a drop in demand. Landlords of high-end properties are increasingly cutting rents and offering concessions to attract tenants as a glut of supply hits the market, the Wall Street Journal reports. The deceleration of high-end rent growth started last year as rents increased only 3.8% compared to 5.6% in Q3 2015, according to an MPF Research report, and that trend is expected to continue this year.
Some NYC developers are already offering would-be tenants up to three months of free rent as a signing bonus while landlords in Houston are increasingly waiving security deposits. But every story has two sides, and here the bad news for landlords is good news for tenants. [WSJ]