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Manhattan rents drop in November after 2 months of increases

New York

MANHATTAN'S apartment renters got a break in November, with leasing costs dropping after two straight months of increases.

The median face rent - before landlord concessions are factored in - fell 1.3 per cent from a year earlier to US$3,318, appraiser Miller Samuel and brokerage Douglas Elliman Real Estate said in a joint report on Thursday.

It was the fourth annual decline in the past sixth months and followed surprise hikes in September and October.

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Landlords were willing to sacrifice higher rents to keep their buildings full. That's because a persistent oversupply of newly built apartments is forcing them to compete for tenants.

Concessions continue to rise. Landlords offered enticements - such as rent-free months and payment of brokers' fees - on 42 per cent of new leases, up from 30 per cent a year earlier. Vacancies declined, a sign that the perks are working.

The deals are compelling enough that would-be buyers are opting to remain renters while they wait for sellers to drop their asking prices in Manhattan's bumpy sales market.

The vacancy rate was 1.65 per cent last month, down from 2.35 per cent a year earlier.

Renters were quick to sign leases. Apartments were listed for an average of 29 days before getting scooped up, down from 49 days a year earlier.

Rents rose in both Brooklyn and northwest Queens, thanks to openings at new developments. The median face rent was up 2 per cent in Brooklyn, to US$2,850, and 10 per cent to US$2,868 in the area that includes the Queens neighbourhoods of Long Island City, Astoria, Sunnyside and Woodside.

The tech giant's decision to set up an office hub in Long Island City hasn't made an impact on the market yet, according to Jonathan Miller, president of Miller Samuel. BLOOMBERG