AIRINC Housing Update
Below are select snapshots of rental markets around the world. These updates are taken from AIRINC's on-site surveys conducted during the first quarter of 2021.
Boston MA, U.S.A. [FALLING]
The COVID-19 pandemic caused a downturn in Boston’s apartment rental market while house rents increased as residents moved to the suburbs. Vacancies increased in the city center due to fewer international arrivals. Facing decreased demand, some landlords enticed tenants by lowering rents, paying brokerage fees, or offering first month’s free rent. The market is expected to partially recover over the next year as assignees return to the rental market.
San Juan, Puerto Rico [RISING]
Demand for apartments dropped in neighborhoods where COVID-19 restrictions closed public beaches and restaurants. This increased demand for rental houses which are in limited supply. Due to a booming sales market, many landlords sold rental houses, further decreasing supply. House rents increased significantly in the popular Guaynabo neighborhood with a large influx of expatriate families.
San Jose, Costa Rica [FALLING]
At the beginning of the COVID-19 pandemic, landlords dropped rents slightly to entice renters. Vacancy rates increased over the last six months, forcing landlords to reduce rents more significantly. This has attracted local renters to high-end units, which are now more affordable due to lack of expatriate demand.
Libreville, Gabon [FALLING]
Rents for high-end units decreased while rents for modest units remained stable. Despite high vacancy rates due to expat departures from the COVID-19 pandemic and stalled or cancelled oil and gas projects, some landlords are hesitant to lower rents.
Tehran, Iran [FALLING]
The COVID-19 pandemic and a weak oil and gas industry increased expatriate departures. Rents for expatriate quality units decreased as there are very few assignee arrivals. Rather than lower rents, some landlords are keeping properties vacant, so the government implemented a “Vacant Property Tax.” Most landlords have found ways around the new tax and keep rents high. Rents for premium units are expected to remain stable into 2022.
Cape Town, South Africa [FALLING]
The COVID-19 pandemic slowed Cape Town’s rental market, causing the lowest rental growth in decades. Vacancy rates increased for larger homes as local national renters downscaled to smaller and cheaper properties to weather the economic storm. Some landlords are converting their holiday homes into long-term rental units, further increasing rental supply. The rental market is expected to remain fairly stable as worldwide vaccination progresses.
Abu Dhabi, U.A.E. [FALLING]
The COVID-19 Pandemic has slowed Abu Dhabi’s rental market. While there have been few departures, Abu Dhabi’s strict quarantine policy discouraged international arrivals, decreasing demand in certain neighborhoods. Local residents have been relocating within the city to larger villas, which has maintained demand for these homes. The market is bottoming out and rents are expected to stabilize in the latter part of 2021.
Dubai, U.A.E. [FALLING]
Dubai experienced decreased rent in the beginning of COVID-19 but has seen varying levels of recovery during the second wave. There is strong demand but limited supply of villas. Apartments in less desirable neighborhoods have seen lowered demand and large vacancy increases. With few expatriate arrivals, vacancies increased overall. Dubai’s rental market is heavily reliant on expatriates and will not recover until mobility restrictions are lifted.
Manila, Philippines [FALLING]
Rents decreased since the beginning of the COVID-19 pandemic and tenants have gained more negotiating power. With few expatriate arrivals, most rental market activity has been from local renters. Tenants are refusing to commit to 12-month leases, forcing landlords to shorten contracts to 7 months. Most neighborhoods have seen decreased demand and increased supply. Once mobility restrictions are lifted, Manila’s expatriate rental market is expected to recover.
Data Points: A selection of AIRINC cost-of-living survey results
The results are in! Data Points, AIRINC's quarterly newsletter, is now available on our website at https://www.air-inc.com/data-points/
Below are some of the key expatriate trends & survey data highlights:
- Rents falling in Cape Town, Dubai, and Manila
- Excise Taxes and VAT in Oman
- Notable state tax developments in the U.S.
- and more...
