Cushman & Wakefield's Multifamily spotlight explores the future of this sector and features key highlights.
Multifamily construction activity this business cycle has consistently exceeded that of the previous decade, driven by Class A development, which accounted for more than 68% of annual deliveries in the peak construction years of 2015-2018. And just 10 markets captured 82% of the deliveries.
Key highlights include:
The construction wave was a response to robust rent and occupancy trends supported by renter household growth, particularly affluent households.
Construction has peaked. Class A deliveries have declined precipitously, down 22% Q3 2017 - Q3 2019, contributing to multifamily pipeline waning.
Construction will continue to soften and remain constrained due to rising construction costs, land scarcity in key pipeline markets, moderating rent growth and slower capital appreciation among multifamily assets.
Cushman & Wakefield foresees a refocusing on workforce housing in the near term given the slower construction environment.
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