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U.S. multi-housing market remains robust

Global Market Perspective, February 2020

The U.S. multi-housing market remained strong throughout 2019. The national vacancy rate stayed near 4% during the year, reflecting robust net absorption that continues to outpace relatively elevated levels of new completions. That sets the stage for asking rents to continue growing in 2020, with ongoing demand for housing but new completions restrained by rising construction costs and a limited construction labour force.

Global Residential Clocks - Rents
Investment demand remains solid in Europe

Investment activity in the European institutional residential market continued to be robust in 2019, although a lack of completed stock constrained activity in some markets. Germany bucked the trend as portfolio rebalancing, following regulatory uncertainty around rent controls, contributed to above-average volumes as more assets came to market. Meanwhile, a lack of available stock in the Netherlands reduced transaction activity despite strong investor demand. Although uncertainty in the UK meant volumes slowed from the record levels of 2018, the number of homes either completed or in the pipeline continued to rise. Rent control regulation came into effect in a number of European markets during 2019. Although this has yet to significantly undermine the investment case for residential, it does introduce a new layer of risk and has had a direct impact on values for some investors in these markets.

Buyer demand holds up in major Asia Pacific markets

In Asia Pacific, buying activity held up in most markets despite broader economic uncertainty and holiday season effects, while mixed leasing demand and competition between developers of newly completed projects impacted price growth across the region. Sales activity continues to diverge, with projects of higher quality in more accessible locations and by top developers much more competitive while ample supply in markets such as Beijing and Singapore led to a decline in prices due to stiff competition.