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Why is rental growth accelerating?

The acceleration in rental growth to 3.7% y/y in March, a 12-month high, does not reflect tighter rental markets. Instead, and in contrast to what we had expected, the rise in earnings growth to a 10-year high looks to have given landlords some latitude to increase rents for existing tenants. That will support rents this year but, with earnings growth then set to slow, annual rental growth will end 2020 at around 3.2%.

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