Market Contradiction: Apartment Vacancies And Rents Are Both On The Rise
Here’s something you don’t hear very often: the price of rent steadily increased in Q4, and so did vacancies.
Over 2015 rents shot up 4.6%, topping rent growth even from 2007 (the last peak year for apartment-rent growth), while the national vacancy rate advanced from 4.3% in Q3 2015 to 4.4% in Q4, the Scotsman Guide reports.
This apparently contradictory data suggests developers are getting ahead of the market by building more than the market can absorb—over 51,000 units were added in the quarter yet net absorption stood at less than 37,000.
Due to this supply, experts expect a slow upward march in vacancies over the next five years and a slowdown in rent growth. [ScotsmanGuide]