This Year's Apartment Glut Could Bring Bad News For Luxury Apartment Landlords

NYC skyline
New York City Skyline

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]

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