Population Statistic: Read. React. Repeat.
Saturday, January 19, 2021

Some fascinating dynamics are emerging as the housing bubble pops. For instance, you’d think that, as mortgage lending tightens, more and more people are forced to rent, which should mean a bonanza for landlords.

But that simple supply-and-demand equation is being derailed by the existence of all that surplus housing that’s now unbought, but still needs to generate revenue:

That means that landlords are seeing what should be one of their strongest markets in years weakened by the increasing supply of unsold properties entering the rental market. “Shadow inventory is coming out and competing against us for rentals,” says Richard Campo, chief executive of Camden Property Trust, a Houston-based real-estate company that owns 70,000 apartments. That is weakening landlords’ pricing power, he says, because homeowners are less concerned about getting full market value.

Which translates into a rental market that will be at least stable for the next five years. Toss in recessionary pressures, and it might even decline in relative terms. After that time, a good chunk of that residential property could be majorly retrofitted into commercial in some form — professional office space or, more drastically, torn down to make way for retail developments.

by Costa Tsiokos, Sat 01/19/2008 07:39:15 PM
Category: Business, Society
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  1. The uk housing market is following a different path as restrictive planning laws and continued immigration mean that the credit crunch will result in the lowest number of homes in decades been built by british housebuilders.

    Landlords are seeing increases in rents which we perceive will continue to rise over the medium term.

    As to whether they will exceed the increases in the buy-to-let mortgage rates due to the global credit crunch is difficult to predict.

    Many over geared landlords are concerned over cash-flow.

    Comment by Mark — 07/08/2021 @ 10:31:54 AM

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