Blackstone's buy-to-rent binge over as prices surge in the US market

Blackstone Group is slowing its purchases of houses to rent amid soaring prices after a buying binge made it the biggest US single-family home landlord.

Blackstone's acquisition pace had declined 70 per cent from its peak last year, when the private equity firm was spending more than US$100 million a week on properties, said Jonathan Gray, global head of real estate for the New York-based firm.

After investing US$8 billion since April 2012 to buy 43,000 homes in 14 cities, the company has narrowed most of its purchasing to Seattle, Atlanta, Miami, Orlando and Tampa.

"The institutional wave has passed," Gray, who oversees almost US$80 billion in property investments, said. "It's at a much lower level than it was 12 or 24 months ago."

Private-equity firms, hedge funds, real estate investment trusts and other institutional investors have spent more than US$20 billion to buy as many as 200,000 rental homes in the last two years.

They snapped up properties after prices fell as much as 35 per cent from the 2006 peak and rental demand rose from the almost five million owners who went through foreclosure since 2008. President Barack Obama credited the investors for helping put a floor under the plunging housing market and consumer advocates later blamed them for soaring prices in some cities.