High-earning renters in New York City’s Manhattan are increasingly migrating to other boroughs as rents there continue to climb, according to a new report from apartment-listing website RentCafé.
Brooklyn more than doubled its count of high-income renter households since 2011, growing at a faster clip than the number of homeowners there with similar incomes during that time.
- Queens has also seen the number of affluent renters migrating to the borough surge in the last decade, with the total rising from 8,500 in 2005 to 29,500 in 2015, a figure that is expected to rise in the coming years. However, the number of owner-occupied households in the borough is almost double, albeit growing at a slower rate.
The rental property market continues to explode across New York City and RentCafé’s latest report shows that the number of high-earning renters there has shot up 137% in the past decade, while owner-occupied households have risen by 64% during the period.
A recent forecast by StreetEasy predicted that rents in Manhattan will rise at a 2% rate this year following a 1.9% increase last year, while rents in Queens are set to grow 2.4% this year after shooting up 4.1% last year. Rents in Brooklyn are expected to rise by 1% following a 0.9% jump last year. And in the Bronx, rents should increase 3.7% in 2017 after climbing 9.8% in 2016.
With rent increases set to continue in New York City this year, there is a growing sense that more renters will turn to homeownership as prices for homes are expected to ease in certain segments of the market. StreetEasy also recorded changes in home-price growth from 2016 to 2017, finding home price increases this year forecast to be on par or below last year.
Demand at the top-tier of the city’s luxury home market is expected to continue to weaken this year amid a glut of supply hitting the market.
As a result, some developers are switching their focus. Toll Brothers CEO Douglas Yearly said on a conference call last month that the company’s City Living business unit is now set to target the middle-luxury market in New York City.
The trend is evident nationally. MPF Research recently reported that an oversupply of luxury apartments nationwide will halt a multi-year trend of price increases and force landlords in many large metros to lower rents.
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