The city’s rental growth is slowing

New York City’s rental market in October continued to see gains — thanks to languid home sales — but the growth is slowing.

The median rent in Manhattan edged up last month to $3,500. But the increase was slight, at just 0.1 percent year-over-year, and flat from September 2019, according to Douglas Elliman’s recent rental market report. The borough’s net effective rent, which includes concessions, grew 0.7 percent year-over-year to $3,409.

This growth has been moderating since July, a month that saw year-over-year growth in Manhattan’s median rent of 5.7 percent, said Jonathan Miller, whose appraisal firm Miller Samuel prepared the report.

“Rents are rising, but not like they were,” Miller said.

The reason behind the deceleration? Slowing sales.

“Would-be buyers are camping out … in the rental market,” Miller said. “There’s a lot of uncertainty out there.”

Manhattan’s residential sales shot up in the second quarter but plunged nearly 15 percent in the third, after there were scores of closings before the July 1 implementation of new mansion taxes on luxury homes.

In Queens, the median rent rose just 0.2 percent. But in Brooklyn, where the number of new leases dropped 20 percent last month, the rental gains were strongest among the three boroughs included in the report, at 2.5 percent year-over-year.

As rents edged higher, so did Manhattan’s vacancy rate on a year-over-year basis, according to the report. Last month it was just over 2 percent, up from around 1.5 percent a year before. And the number of new leases fell by 12.5 percent in the borough to 4,236.

October also marked the seventh straight month with year-over-year drops in concessions, according to the report’s findings. At 36 percent, the share of new rental transactions where the landlord gave something back was down from 41 percent last year.

“It’s just a slow grind in the reduction of the reliance on the concession,” Miller said.