Jade, a 325-unit apartment complex developed by Greystar at 202 Mill Road in Everett, began resident move-ins in early summer/ Image courtesy of @flauntboston
Greater Boston renters are getting some relief from apartment rent hikes following completion of a series of new developments, with vacancies in Allston-Brighton hitting double digits.
The vacancy rate increased from 5.6 to 6.3 percent across the region over the past year, according to Colliers’ third-quarter multifamily report.
“As vacancies have risen, that’s taken a little bit of luster off the rent growth numbers,” said Jeffrey Myers, Colliers’ research director in Boston.
Average rents increased 2.1 percent in the past 12 months, hitting $2,877, or $3.21 per square foot. Nearly 10,000 apartments are under construction in the region, down from nearly 10,500 a year ago.
The rental market is particularly favorable to renters in the Allston-Brighton neighborhood. Nearly 1,000 apartments have been completed in the past year, including the 343-unit Verra complex on the Harvard Enterprise Research Campus, which is offering two months free rent, and the 265-unit Harper complex at 80 Rugg Road, which is offering 10 weeks free rent.
Allston-Brighton’s has Boston’s highest vacancy rate at nearly 11 percent. Back Bay/South End has the city’s lowest vacancy rate at 2.6 percent, according to the report.
The pace of construction is expected to decline following a downturn in construction starts, suggesting that the pause in big rent hikes will be short-lived. Over the past year, the number units under construction has dropped 5.5 percent.
“Lending institutions are requiring more [equity] from developers and construction costs themselves are high. When you layer in the challenges of getting projects up and running, the properties still in lease-up will gain momentum and that rent growth should gain traction,” Myers said.
On the demand side, the region’s tepid job market also will factor into future rent trends.
Continued stagnation in job growth in key local industries such as education and health services would depress demand for rental housing, potentially moderating future rent hikes.
“We need to regain our footing and add jobs across a wide range of industries where we haven’t been in the past couple of years,” Myers said.
The report tracks rents at nearly 252,000 apartments in Greater Boston.
