Across the world, the rental property market is impacted by Covid-19. As the world recovers from the pandemic, the market is expected to reach $1765.5 billion in 2021. With the real estate trends changing, let’s explore how the market fares in different countries.
United States
Across the world, the rental property market is impacted by Covid-19. As the world recovers from the pandemic, the market is expected to reach $1765.5 billion in 2021. With the real estate trends changing, let’s explore how the market fares in different countries.
Urban to Suburban Shift
The high-cost urban cities of the U.S. were affected the most by the Covid recession due to five factors
Remote working
Reduced use of public transport
Need of more living space
A desire for easy outdoor access
Closing of essential urban amenities
Along with these factors, the high cost of urban living was also a promoting factor for more people to shift from urban to suburbans. In 2021, the trend will continue causing a decrease in the rent prices in metropolitan cities and making suburban areas the key to rental market recovery.
More Demand For Single-Family Housing
As more people work from home, the need for multi-room spacious houses is increasing. Single-family homes have become much more sought after due to the privacy and space they provide. The John Burns report states that the Single-Family Rental market Index has reached 90 in the first quarter of 2021, an all-time record high.
Multifamily rents went down sharply in 2020 and are expected to follow the same trend this year. According to the FreddieMac 2021 Multifamily Outlook Report, multifamily property rents are predicted to decline by 0.2%, with large markets like New York and San Francisco performing much worse.
The Best Rental Markets
Boise, Idaho
Boise is seen as the best long-term real estate investment. Even during the pandemic, the city’s property prices have continued to rise. In 2021, Boise is predicted to see a sales growth of 9.8% and a price growth of 9.1%. Despite the growing prices, the demand for property in this city remains high.
Dallas, Texas
Dallas is a city with growing job vacancies, which means the demand for rental properties will also be high. With a projected population growth of 17.9%, this is one of the best real estate markets for 2021. However, investors will see good competition as the inventory is limited and the demand is high.
Tampa Bay, Florida
Tampa Bay is one of the most extensive metro cities in Florida and suitable for retirees. The purchase price for investors is about 32% below the national average. A fast-growing city, it provides exciting opportunities for real estate investment in 2021. The expected sales growth of Tampa Bay is 8.7%, and the price growth is 7.5%.
Jacksonville, Florida
With growing job opportunities, Jacksonville makes it to the list of the best rental markets in the U.S. The average rent in this city grew up to 8% as compared to last year. Jacksonville has diverse industrial opportunities in the fields of finance, healthcare, and technology. The city is expected to see a sales growth of 9.4% and a price growth of 5% in 2021.
Canada
Canada has also seen a drop in rental prices due to the pandemic, especially in major cities like Toronto. But this is expected to be short-term, and the market may recover as the pandemic wanes.
Detached homes will be a priority
Last year, many workers moved from urban to suburban areas due to remote working possibilities. As people prefer working from home, even as the pandemic subsides, suburban regions will still see a massive demand for rental property.
In 2020, the prices of one-story single-family homes rose by 15.9%. Detached homes are more suitable for remote working as they are more spacious and readily available in low-cost areas.
The Best Rental Markets
Hamilton, Ontario
Hamilton is home to several industries like food, hospitality, and healthcare. Over the last few years, the city has seen an increase in job opportunities and a steady increase in population. The prices are also lower as compared to other major cities like Toronto. This is one of the best cities to invest in single family homes, as their price has increased by 31% compared to the previous year. If you are looking to invest in Hamilton’s real estate, keep in mind that the inventory is extremely limited, with homes being sold within 14 days of listing.
Vancouver, British Columbia
Vancouver’s housing market is stabilizing, with transaction volumes returning to normal. The city is not just beautiful but also attracts a lot of people. With a projected population of 3.8 million by 2050, it becomes one of the best rental markets in Canada. Prices have increased for all types of homes in Vancouver, with the cost of detached houses increasing by 24% compared to last year. The city also has excellent amenities and a good transport network.
Windsor, Ontario
Windsor is an affordable real estate market whose prices are soon expected to rise. With a prediction of a 15 to 20% rise in the average residential sales price in 2021, it is a hot market for investors. Markets like Windsor that have low costs are only the beginning of a real estate boom. People investing in this city can expect high returns once the country settles from Covid-19.
Australia
Australia is experiencing a boom in property demand at the end of buying season. Several factors are driving people to invest in real estate. As the popularity of Australia rises, housing prices continue to soar, making it one of the least affordable countries in the world.
One of the driving factors for increasing home rates is Australia’s excellent handling of the Covid crisis. Some places have recently reported zero new cases of Covid-19.
Similar to other countries, the housing trends are indicating a shift to less populated areas. More people are willing to invest in single family homes, as they are more spacious and better for remote working.
But as inventory is tight, home prices continue to rise. This is the best time for investors looking to invest in the Australian rental property market. The Covid-induced buying boom is not expected to slow down anytime soon. Even as more homes are listed for sale, they cannot keep up with the vast demand. This ensures excellent returns in the coming years.
The average sales volume in Australia is 116% higher than last year. Out of the many factors, the fear of missing out is driving people to invest in property.
United Kingdom
After the pandemic, people of the U.K. have shown an interest in investing in real estate. Whether it is renting or buying, the trends look promising for the country.
Housing Boom
Unlike the previous year, the U.K. is witnessing a housing frenzy. Wealthy people are investing to buy homes as they are not as affected by the economic effects of the pandemic.
Similar to other countries, people are looking to move outside London into other less populated areas. As housing prices continue to rise, home buyers are seeking affordable housing outside urban areas.
The private rental price growth in the U.K. has reached 1.3% as compared to last year. Real estate investors can invest in suburban single-family homes as more people are looking to move. As the British pound gets weaker, many overseas real estate investors are looking at this as an opportunity to enter the British property market.
Northern England Attracting Residents
Liverpool, Edinburgh, and other affordable housing markets are attracting new residents. As a result, the rental prices are rising, with the average home price in Edinburgh rising by 12.3% over the last five years. The region also promises high yields, making it a good area for real estate investment.
Takeaway
The rental market is recovering from the impact of the pandemic. As seen in the above reports,
Most countries are witnessing a housing boom, with more people willing to buy or move homes.
Urban housing prices are dipping but may recover soon.
People prefer suburban areas as houses are spacious and affordable.
Single family homes are seeing increasing demand as they are feasible for remote working.
How to make the right investment?
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