Brooklyn beats Manhattan for New York apartment rent increases

[NEW YORK] Apartment rents rose the most in more than three years in Brooklyn, where a surge of high-end development is pushing up costs.

With the value of landlord concessions subtracted, the median rent in the New York borough climbed 5.9 per cent from a year earlier to US$2,914, the biggest gain since February 2016, appraiser Miller Samuel Inc and brokerage Douglas Elliman Real Estate said in a report on Thursday. It was the seventh straight month with an increase.

Landlords are the winners this year as would-be homebuyers across the city linger in the rental market while waiting for sale prices to decline. Openings at new luxury towers are also pumping up leasing costs in trendy Brooklyn, long viewed as a less-costly alternative to Manhattan. Rents soared almost 17 per cent from a year earlier in new developments, while the increase for existing apartments was 3.9 per cent, according to Jonathan Miller, president of Miller Samuel.

Brooklyn sale prices, meanwhile, continued to reach new highs. The median rose 4.5 per cent in the second quarter from a year earlier to US$815,000, setting a record for the seventh time in three years, the firms said in a separate report. The number of purchases fell 4.5 per cent.

Rent increases were lighter in Manhattan, where leasing costs have climbed from a year earlier in every month this year. The median minus concessions rose 4.7 per cent in June to $3,471. In north-west Queens - Long Island City, Astoria, Sunnyside and Woodside - it was US$2,789, up 1.6 per cent.

BLOOMBERG