A report from CBRE, the world’s largest commercial real estate services firm, states that multifamily rents will increase 2.5 percent a year for the next three years, with the pace of construction leveling off at 216,000 units each year through 2018. It has been 3.9 percent growth a year since the beginning of the recovery in 2010. “The multi-housing sector is only now beginning to fill a supply shortage that has existed following a three-year-long drought in development resulting from the recession,” Jim Costello, CBRE’s Head of Americas Investment Research, said in the report. “We anticipate that most of the new supply that will come online over the next few years will be absorbed by pent-up demand.” According to worldpropertychannel.com, tighter credit will keep the supply more equivalent to the demand, as banks are only lending to developers with proven track records. Boston, Washington, D. C., Seattle and Southeast Florida offer the best opportunities for investment because rent levels are higher than construction costs in those markets, as MHProNews.com has learned.
(Photo credit: bloombergbusinessweek.com–new multifamily housing)