Buyers on the sidelines are giving a boost to high-end Manhattan rentals

But the rental market is still flooded with concessions

New York /
Oct.October 11, 2018 08:30 AM

(Credit: iStock)

 

Manhattan’s rental market is poised to benefit from the sales slowdown.

As prospective buyers sit on the sidelines, the luxury rental market is seeing a boost in new leases, according to Douglas Elliman’s Manhattan rental report. The high-end segment saw an 11 percent increase in new leases in September.

“We have definitely noticed an uptick of customers who were on the sales side,” said Hal Gavzie, Elliman’s executive manager of leasing.

The shift comes as the sales market remains sluggish, especially on the high end. Overall, the median net effective rental price climbed 1.8 percent from a year earlier to $3,394, the report said. In the luxury segment, median rent inched down 0.1 percent to $8,191.

Meanwhile, the market still has rampant concessions. The share of new leases with incentives in September was 37.4 percent — up from 26.5 percent a year earlier.

“It’s where we’re at right now, there’s so much inventory on the market,” Gavzie said. “Concessions are definitely helping but it’s not enough.”

In a separate report, Citi Habitats noted that while the vacancy rate has dropped year over year, it reached the highest level in five months. In September, as the rental market comes off its peak season, the rate climbed to 1.36 percent from 1.29 percent in August.

“Our September results show that even small increases in asking rents have an impact on demand,” said Citi Habitats President Gary Malin. “In the rental market, the old adage of ‘location, location, location’ has been replaced with ‘price, price, price.’”


Related Articles

arrow_forward_ios
Clockwise from left: John D. Rockefeller, Izzy Englander, Steven Mnuchin, David Koch, Jacqueline Bouvier, and William Zeckendorf (Credit: Getty Images and StreetEasy)
For 15 years, David Koch lived at the world’s “richest building”
For 15 years, David Koch lived at the world’s “richest building”
John Giannone and Jac Credaroli (Credit: iStock)
Two Elliman agents launch platform to provide renters, buyers and sellers up to $50K in unsecured loans
Two Elliman agents launch platform to provide renters, buyers and sellers up to $50K in unsecured loans
Jacob Sudhoff and Scott Durkin (Credit: Sudhoff Companies, Emily Assiran, iStock)
Douglas Elliman is coming to Texas
Douglas Elliman is coming to Texas
Douglas Elliman's Howard Lorber and Tongo's Brandon Wright (Getty Images, LinkedIn/Brandon Wright)
Elliman gets into payday loan business as market cools
Elliman gets into payday loan business as market cools
(Illustration by The Real Deal with Getty Images)
Home prices cooled at historic rate in July
Home prices cooled at historic rate in July
(Photo Illustration by The Real Deal with Getty Images)
Cooling Sun Belt markets lead canceled home contracts
Cooling Sun Belt markets lead canceled home contracts
30 Front Street & 294 Park Place (Streeteasy, Getty)
Brooklyn luxury market can’t shake slump
Brooklyn luxury market can’t shake slump
From left: 182 East 64th Street and 520 West 28th Street (Getty Images, Brown Harris Stevens, Godsfriendchuck, CC BY-SA 4.0 - via Wikimedia Commons)
Manhattan luxury contracts hold steady in September
Manhattan luxury contracts hold steady in September
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...