Rent Decline Due to Remote Work Expansion... Dropping from $3,500 to the $2,700 Range in April
Apartment Vacancy Rate Also Hits Record High
[Asia Economy Reporter Kwon Jae-hee] Rental prices for apartments in Manhattan, New York, have hit their lowest level in 10 years. This is the result of tenants leaving the expensive urban center as remote work spread due to the COVID-19 pandemic.
On the 9th (local time), Bloomberg News cited a report jointly published by housing appraisal company Miller Samuel and real estate brokerage Douglas Elliman, stating that the average rent in Manhattan in November fell 22% compared to the same month last year, reaching $2,743 (approximately 2.98 million KRW). This is the lowest level since October 2010.
The decline in rent is largely due to the spread of remote work amid the COVID-19 pandemic. As remote work became possible, tenants left the expensive urban center. In early April, Manhattan apartment rents reached $3,500 but then dropped sharply.
Vacancy rates in Manhattan apartments also soared. As of November, the number of vacant units more than doubled compared to the same month last year, reaching 15,130 units. The vacancy rate hit a record high of 6.14%.
Rents in other areas of New York outside Manhattan also declined. Brooklyn saw an 8.3% drop to $2,619, and Queens fell 21% to $2,275 during the same period.
With prices plunging and vacancies expanding, landlords have lowered rents to levels not seen since the financial crisis and are offering various incentives such as several months of free rent. According to the report, landlords provided incentives in 57% of all new deals made in Manhattan last month.
Thanks to the effects of incentives and other inducements, the number of new contracts last month reached 4,015, marking the highest number of November transactions in the past 12 years.
Jonathan Miller, president of Miller Samuel Inc., said, "For rents to stabilize, this trend will continue significantly into 2021," adding, "It entirely depends on how quickly people return to the office."
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