CBRE Article - Declining vacancy rates

[Jorge Abreu]

👀Multifamily real estate was relatively resilient during the 2020 recession, with a smaller drop in investment volumes than most other mainstream asset types. The sector’s investment appeal was characterized by its solid market performance, with low vacancy rates and high rental collection rates. Despite the negative impact of lockdown measures and remote working arrangements on many urban/CBD properties, investment volumes remained strong in H1 2021, with increased pricing in many regions.

👉We expect declining vacancy rates over the next 12 months, which will lead to solid rent growth. The urban core submarkets that were most affected by COVID likely will recover steadily as more workers return to the office. We also expect further cap rate/yield compression as the appetite for multifamily investment rises globally.

Source CBRE

What are your thoughts on this?

[Taylor L.]

I think they're probably right! However I always take things that I want to hear with a big grain of salt. Those declining rates come from somewhere. I'd like to dig more into why. Migration? New household formation and development not keeping up with natural demand increase over time? Something else?

If it's migration, those folks are moving from somewhere.