Rental rates for upscale homes have reached their peak globally.

International real estate broker Knight Frank claims that after months of quick gains fueled by a significant supply/demand imbalance, growth in prime global rental markets appears to have peaked.

In the year ending in June 2022, the latest Prime Global Rental Index from Knight Frank increased 11.3%, down from 11.9% in March 2022. Although growth is now slowing in some important markets, the dip is minor and average annual growth is still in the double digits.

New York tops the list with a 39% annual growth rate. Manhattan’s prime rents are currently 17% higher than they were before the pandemic. London placed second in the year to June with annual growth of 27%, but recent data indicate that this growth is beginning to slow. With rental growth of 15.8%, Singapore has surpassed Toronto (15.3%) this quarter to take third place. The city-state reopened in April, which resulted in an increase in expatriates and returning professionals, many of whom chose to rent.

Kate Everett-Allen of Knight Frank predicts that the post-pandemic rental recovery will change over the coming months. Higher mortgage rates have the potential to boost both supply and demand for rental properties. Some buyers will be forced to rent due to the sales market’s declining affordability, and as a result of there being fewer buyers, some sellers may unintentionally become landlords.