New York and Singapore saw the fastest increase in rent prices

The pandemic changed the way people work and where they prefer to live. Since many employees shifted to remote work, they were no longer required to stay in one city. Rents in large cities plummeted, and the demand for suburban homes skyrocketed. Two years later, as the world continues its recovery from COVID, big cities have once again regained their popularity among tenants, which led to quick and sharp rent increases. 

Rents in Singapore and New York City jumped 8.5 percent in the first six months of 2022, according to the report released by a British real estate advisor Savills. Rental prices in these two cities are rising at the fastest rate in the world. In June, the average rent in Manhattan set a new record, reaching over $5,000 a month. Rents in New York City will likely continue to increase through the end of this summer due to high mortgage rates, rising inflation, and low inventory. 

“Megacities are once again thriving as tenants are drawn to the urban living they offer. New York reached the highest rents on record, driven by tight inventory and demand for larger spaces, for which renters are willing to pay a premium,” the report says. “Despite a broader US trend of migration to smaller cities, the Big Apple continues to draw from a deep demand base and is forecast to maintain low vacancy rates over the summer, its strongest season for rentals.”

Four US cities, including New York, Miami, Los Angeles, and San Francisco, have made the Savills’ list. All of them saw rent increases of 4 percent or more. Meanwhile, rents in some big cities in the Asia Pacific, such as Shenzhen and Hong Kong, dropped 1.3 percent in the first half of 2022. Despite the economic uncertainty, rents in major cities outpaced the capital value growth, increasing by an average of 3.1 percent.

“A lack of inventory will continue to fuel growth in the near term, especially for the type of residences prime tenants are demanding: centrally located, quality units with larger floor plates,” Paul Tostevin, head of Savills world research, told Bloomberg. “For these properties, the Covid lockdown rental deal is definitely a thing of the past.”

Resources: 

“Savills Prime Residential Index: World Cities – Rents and Yields” (Savills, 2022)

“Singapore, New York Tie for Highest First Half Rental Growth,” by Faris Mokhtar (Bloomberg, 2022)

“The cities where rent prices have skyrocketed the most in 2022—with four U.S. cities in the top 10,” by Tristan Bove (Fortune, 2022)