New York and Hong Kong Luxury Apartments Witness Dip in Rents

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While luxury apartment rents in global cities continue to command high prices, recent data indicates a subtle softening in certain markets. According to Knight Frank, overall, global cities saw a 5.2% increase in luxury rents in the fourth quarter compared to the previous year, signalling a moderation from recent peaks but remaining double the long-term average.

In New York, where the median rent for the top 5% of the market stands at $4,195, there was marginal change year over year. However, all other nine cities analysed reported annual gains.

Sydney stood out with an impressive 18% year-over-year increase in prime rents, attributed to limited construction during the pandemic and heightened internal migration to the city. Knight Frank anticipates slower rent growth in Sydney as affordability limits are reached and more supply enters the market to meet demand.

Liam Bailey, Knight Frank’s global head of research, acknowledged the robust growth experienced by global rental markets over the past three years but foresees a slowdown in growth this year. This projection is due to affordability constraints that limit tenants’ ability to bid higher, signalling a potential shift in the dynamics of luxury apartment rentals.