Manhattan's luxury apartment dwellers sending rents soaring

New York

IT'S been a good year for Manhattan's apartment landlords, and November was their best month yet.

Units leased for a median of US$3,502 after subtracting the value of concessions - just US$19 short of the record high, reached in July, according to a report released on Thursday by appraiser Miller Samuel and brokerage Douglas Elliman Real Estate.

While rents have climbed in every month in 2019, November's 8.7 per cent jump from a year earlier was the biggest since September 2012 and followed two much-smaller increases.

"What we are seeing is tremendous price growth in the luxury rental market," Jonathan Miller, the president of Miller Samuel, said in an interview. "It's not so much that individual units are rising much, but the mix is shifting."

New Yorkers with a taste for the fancy are in no hurry to buy homes. While they wait for purchase prices to come down, they're renting some of Manhattan's most lavish apartments, and landlords are taking advantage of the demand.

Rent growth in November was strongest at the highest end of the market, and that's going hand-in-hand with the weakness in luxury sales, Mr Miller said.

Last month, super-luxury apartments - the top 5 per cent - rented for a median of US$13,000 without concessions factored in, a 13 per cent jump from a year earlier.

Across all price levels, the share of new leases with landlord incentives has been declining steadily. About 39 per cent of agreements signed in November - not including renewals - came with a sweetener such as a free month.

While that is down from 42 per cent a year earlier, the rate is still significant, according to Mr Miller. BLOOMBERG