By Paul Bregeron
The is an excerpt from Globest.com.
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“The industry is underpinned by strong fundamentals and it has shown resilience during these disruptive times. As such, despite the uncertain long-term implications of the pandemic, it should not affect the dynamics of supply and demand. Demand for multifamily property is expected to remain strong and will continue to outpace supply.”
On the supply side, while the pace of new construction has picked up meaningfully compared to the lows seen a decade ago, this is projected to not be enough to make up for current housing shortfalls, O’Brien wrote. It is estimated that 2.3 million homes are needed each year over the next 10 years to balance the supply/demand imbalance.
“Until construction ramps up, housing shortages will persist, increasing demand for the rental market. The multifamily sector is projected to continue to perform well as it has over the past two decades.”
He said that rental growth for apartments is also projected to continue to outpace inflation, making it a good hedge against the pressure of rising prices.