Multifamily Model continues upward trend In 2021

JULY 20, 2021

Real estate assets have always been considered one of the best investments that provide attractive returns, mainly in crisis situations in which the real estate market has been resilient.

Such is the case of the residential sector, which remained stable during 2020 and has registered an upward trend at the end of the same year and early 2021 .

Result of the natural need for housing and the importance it acquired during the multiple confinements.

Various specialists highlight that the multifamily or residential rental model is one of the most strengthened after the events of last year, since it allows granting housing to those who cannot or do not wish to purchase a property at that time .

In the United States, the multifamily is a mature market , which in times of crisis, has remained firm compared to other types of real estate assets.

According to CBRE, only at the end of 2019, it was recorded that 35% of the American population preferred to rent rather than buy a house , a figure that has grown over the years.

Fact confirmed by RealPage, noting that the demand for this type of home increased 60% in 2020 compared to 2019.

While in 2021, with the reopening of local economies, demand has been boosted .

According to the Apartment Rents Surge in April market study, demand increased 1.3% in April (the fastest pace observed for a single month in the last decade). Rebound that occurred, mainly in luxury Class A properties.

“Class A communities posted 2% rental growth for the month, compared to increases of 1.3% for mid-market Class B projects and 0.3% in Class C inventory.”

It should be noted that this model also registered during the pandemic a greater preference for less urban regions that offered properties with more space for the same or lower cost.

Jeronimo Hirschfeld, Founder and CEO of ONE Real Estate Investment (OREI), pointed out in an exclusive interview for Inmobiliare that since the beginning of the health crisis, the departure of people from cities like New York amounts to more than 450 thousand , has left a high number of vacant units.

“The ease and comfort that the remote work scheme has provided throughout the world, has made large cities like New York register a large vacancy in apartments and buildings for rent. Today, they offer you two to three months free if you sign a one-year contract, they are giving a 20% discount. I have never seen anything like this, and this is because people prefer to look for more space for the same rent payment “.

Cities such as Austin, Arizona, San Antonio, Dallas, North Carolina, Charlotte, Harvey and Fayetteville, are some where the company has seen higher demand .

It also indicates that despite the situation experienced last year, in which there was a slight slowdown in the market.

111 billion dollars in transactions were reported, so for the current year, they estimate around 125 billion . A figure that still remains below the more than 138 billion in 2019.