Apartment rents in New York City are projected to rise at a greater rate than either housing sales prices or household incomes in 2016. This follows a record-breaking pace in 2015 when the median rent for one-bedroom units in Manhattan jumped 10.7 per cent.
A slate of predictions for the new year from the luxury real estate brokerage, Halstead Property, suggests continued low vacancy rates and the forecast 3.2 per cent increase in the citywide median rent, to hit U.S. $3,055 (CAD $4,307), will prompt developers to cater to new entry-level homebuyers.
“Expect them to build condominiums with smaller units — 2 bedrooms, 1-bedroom units and studios — averaging from $800,000 to over $1 million in the NYC area,” says real estate sales executive, Louise Phillips Forbes.
While apartment rents in Brooklyn are generally lower than in Manhattan, Phillips Forbes predicts the borough will experience the sharpest price increases in the coming year. Data from the most recently available Elliman Report, which tracks rental housing statistics for Manhattan, Brooklyn and Queens, pegs the November 2015 median rental price at U.S. $3,361 (CAD $4,739) in Manhattan versus $U.S. $2,935 (CAD S4,138) in Brooklyn.
Queens offers the lowest apartment rents of the surveyed areas with a November 2015 median of U.S. $2,735 (CAD $3,856). Phillips Forbes also sees it as a pull for first-time homebuyers, particularly among Millennials, who accounted for approximately one-third of homebuyers last year.
“More and more people are now discovering Queens as the next frontier,” she says. “Keep an eye on Jamaica, Sunnyside and Woodside in particular. Also, don’t be surprised if buyers in their mid 30s trend toward the suburbs if they can get more for less.”