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Prime London Market is a Top Performer in Global Rental Price Growth

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    Global Prime Rents Rise by 3.5% on Average YoY

    Property experts Knight Frank recently published their ‘Prime Global Rental Index’, revealing the latest trends in prime market rents worldwide for the second quarter of 2024. The report looks at fifteen major cities across the globe and tracks the average rental price growth in prime markets for these locations up to June 2024.

    Knight Frank found that average prime rental growth across all these cities was 3.5% annually, the same figure as observed in the first quarter. While this is lower than the average growth observed in recent years, it is only marginally lower than the long-run pre-Covid average of 3.8%.

    Quarterly growth has also increased, showing 1.1% in the second quarter compared to the long-term trend rate of 0.9%.

    Further Reading: Global buy-to-let property is an increasingly popular investment choice, opening up new markets to investors. Learn more with our guide to the best buy-to-let areas in London.

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      Kensington area in winter, London

      London Prime Rents Rise by 56.5% Since 2021

      Knight Frank’s data shows that 80% of markets see positive rental growth year-on-year. When compiling the report, they looked at New York, London, Miami, Singapore, Sydney, Toronto, Berlin, Los Angeles, Tokyo, Auckland, Monaco, Frankfurt, Zurich, Geneva, and Hong Kong.

      Hong Kong, Toronto, and Singapore were the only cities that did not see positive yearly growth this quarter.

      When comparing the latest figures to Q1 2021, prime rents are now 27% above these levels on average. The most robust growth was found in New York and London, where rents have risen by over 50% since Q1 2021, making these cities long-term leaders in prime rental inflation.

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      Prime Rents Likely to See Above-Trend Growth Going Forward

      During the pandemic-driven housing boom, rents underperformed compared to housing prices. However, in 2022 and 2023, rents climbed rapidly as workers returned to cities post-Covid, and rising interest rates impacted house prices.

      According to Knight Frank, the ongoing supply-demand imbalances in these major markets will spur prime rental inflation in the future.

      Liam Bailey, Global Head of Research at Knight Frank, commented: “The recent slowing in prime rental growth suggests an end to the substantial upward repricing of key city markets seen over recent years. Even the luxury sector is subject to affordability constraints, and in most cities, rental growth has moved closer to long-term trend levels.

      “However, with the majority of markets still experiencing pressure from relatively strong demand set against limited supply – exacerbated by Covid-era development disruptions – upward pressure on rents is likely to support above-trend growth in the medium term.”

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      Jessica Ferris

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      Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.

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