Manhattan flat leasing hits a record as deals soar

It is a renter’s market in New York City, and flat-seekers jumped in last month to get themselves a deal.

In Manhattan, the number of newly signed leases climbed 17 per cent in May from a year earlier to 5,969, the biggest total for the month in nine years of record-keeping, according to a report from appraiser Miller Samuel and brokerage Douglas Elliman Real Estate. In Brooklyn, new apartment contracts surged 23 per cent to 1,460, also the biggest total for the month in data going back to 2008.

Renters are taking advantage of a market that is crowded with listings, weighing offers of free rent and other perks from landlords who are working to keep their units filled. Twenty-five per cent of all new leases signed last month in Manhattan came with some kind of concession from the owner, about double the share in May 2016, Miller Samuel and Douglas Elliman said. In Brooklyn, sweeteners were offered on 15 per cent of new agreements, up from 8.8 per cent a year earlier.

“They realise, ‘I do have quite a bit of options so let me take a look,’” Hal Gavzie, Douglas Elliman’s executive director of leasing, said of renters’ thinking. “Let us just test the water and see what is out there.”

In Manhattan, the surge of renter interest was enough to push down the vacancy rate to the lowest in two years, 1.72 per cent, the firms said. It was the first time since 2015 that the figure dipped below 2 per cent. 

While all that deal-making helped attract tenants, it kept a lid on rent growth. In Manhattan, net effective rents – calculated after incentives are factored in – were up 0.6 per cent in May from a year earlier, to a median of US$3,377, the firms said. In Brooklyn, the median rent after concessions dropped 2.1 per cent to US$2,782.

Some landlords are luring tenants by actually lowering their asking prices – a way to stand out from the crowd where free months of rent and payment of broker’s fees have become commonplace, Gavzie said.

“If it is priced correctly, it is going to get rented out a lot quicker than another no-fee listing,” he said.