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Manhattan apartments get more costly, even in dead of winter

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The year is off to a good start for Manhattan apartment landlords, who have been able to increase rents, offer fewer incentives and retain tenants.

[NEW YORK] The year is off to a good start for Manhattan apartment landlords, who have been able to increase rents, offer fewer incentives and retain tenants.

In February, the median rent with the value of concessions factored in climbed 4.1 per cent from a year earlier to US$3,297, appraiser Miller Samuel Inc and brokerage Douglas Elliman Real Estate said in a report Thursday. Rents also rose in January.

Landlords also offered fewer deal sweeteners for a second straight month, following 43 months of increases. The share of new leases with incentives, which averaged 1.2 months of free rent, dropped to 42 per cent from 48 per cent a year earlier.

New signings fell for a fourth time as landlords succeeded at getting renters to renew rather than move. February's new leases totaled 3,443, down 11 per cent.

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The vacancy rate tightened to 1.81 per cent from 2.29 per cent.

Landlords are able to charge more and grant fewer incentives at least partly thanks to the turbulent sales market, according to Jonathan Miller, president of Miller Samuel. Would-be buyers are camping out in their apartments, creating more competition among new renters in search of a deal.

In its own report Thursday, brokerage Citi Habitats said the Soho and Tribeca area had the borough's priciest rents last month, with a median of US$5,695. Washington Heights was the least-expensive neighbourhood at US$2,250. Below 96th Street, the cheapest rents were on the Upper East Side, where the median was US$3,400.

In northwest Queens, a jump in new studio-apartment leases dragged down rents for the first time in four months. The median, including concessions, fell 1.1 per cent to US$2,685, Miller Samuel and Douglas Elliman said.

Brooklyn rents climbed for a third month, to a median of US$2,784. Just 45 per cent of new leases came with incentives, down from 48 per cent a year earlier.

BLOOMBERG