Rental growth hit record highs last year as a wave of pent-up demand, plenty of savings, the need for more space and lack of homes for sale all drove rental household formation higher. But some of those factors supporting demand are now starting to fade, and the boom in rents means many households will struggle to afford another large hike. Alongside a surge in apartment construction, that means rental growth will slow over the next few years. From 5% y/y at the end of 2021, we expect effective rental growth to slow to 4.0% by end-2022 and 1.5% by end-2025.
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