Buyers on the sidelines are giving a boost to high-end Manhattan rentals
But the rental market is still flooded with concessions
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.’”