U.S. multifamily fundamentals resisted major changes, despite the persistence of elevated deliveries through Q2 2018. Vacancy levels held at 5.2% and rents continued to climb, increasing by 2.4% over the past year.
With high levels of new deliveries expected to continue into mid-2019, increases in rental growth will remain limited. As the price of single-family homes continues to increase, prospects for multifamily demand look strong in the medium to long-term.
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U.S.: Multifamily Residential
Refers to rents for en-bloc rental apartment communities Source: JLL, July 2018
EMEA: Central City
Refers to rents for residential units in the central areas of each city Source: JLL, REAS, July 2018
AP: Prime Residential
Refers to rents for prime residential units in each city Source: JLL, July 2018
Source: JLL, July 2018
Institutional investor demand continues to be robust in Europe. Transaction volumes in Germany’s residential sector reached €11.3 billion in H1 2018, 35% above the 5-year average. In the Netherlands, the investment market experienced robust levels of demand during the second quarter, with volumes exceeding the previous two years, primarily due to Vesteda’s acquisition of the National Nederlanden portfolio. Activity in the UK residential market remains broadly stable although residential investment is defying wider market trends, with 2018 on track for record volumes (ahead of the £2.4 billion seen in 2017).
In Asia Pacific, government tightening measures were introduced in Hong Kong and Singapore in the second quarter in a bid to cool markets. In China, price caps were kept in place in Q2 for new launches in Shanghai, while developers offered more competitive prices in a bid to increase sales against a tight policy environment in Beijing.
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