Rents in 10 world cities, including London, slow down

The Knight Frank prime rental index reveals that the days of rapidly rising prime rents appear to be over.

central prime

Prime rents in the world’s big cities, including London, are starting to slow down, new figures from Knight Frank show.

An annual rate easing to 5.2% over the past 12 months tells a story of rapidly rising rent prices now easing, according to Knight Frank’s Prime Global Rental Index of 10 cities.

Key index findings:
  •  Annual rental growth in Prime Central London stands at 7.9%, the lowest figure in two years, indicating a cooling trend as demand and supply rebalance.
  •  The rate is down from the 8.1% seen in Q2 and is the lowest level observed since 2021 Q3, although rents are still rising above their long-term pre-pandemic trend rate.
  •  On a quarterly basis, average rental growth declined by 0.6%, providing some relief for tenants. This marks the first quarterly fall observed since Q1 2021.
  •  Sydney claims the top spot in luxury rents increases over the past 12-months, with 18.1% growth annually and 4% quarterly.
  •  Prime rents in New York have fallen each month during the most recent quarter. The city sits at the bottom of the ranking with -0.3% annual and -2.5% quarterly growth.
Perfect storm
Liam Bailey - Knight Frank
Liam Bailey, Global Head of Research, Knight Frank

Liam Bailey, Global Head of Research at Knight Frank, says: “Over the past three years, prime global rental markets have experienced one of their strongest booms on record, with a perfect storm of low existing supply reinforced by low new-build completions meeting strong renewed demand supported by healthy labour markets.

“Rents, which were running at four times their long-term rate a year ago, are now running at ‘only’ double that rate,” he says.

Expect rental markets to normalize over the rest of 2024.”

“However, the direction of travel is clear – expect rental markets to normalize over the rest of 2024.”

The other cities in the Knight Frank index are Auckland, Singapore, Geneva, Toronto, Monaco, Tokyo and Hong Kong.


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