The Kensington in Boston was one of a handful of new apartment buildings to open in the third quarter.
Thomas Grillo
Real Estate Editor- Boston Business Journal
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The good news is that Greater Boston’s multifamily housing market continued to expand in the third quarter amid improved job growth, increased construction and rising rents. The bad news is a glut of new apartments in development is expected to stall the rental market’s momentum in the years ahead, according to a new report from ARA Real Estate Investment Services.
Vacancy rates in the region increased by 0.2 percentage points to 3.8 percent in the July-through-September period as 1,100 new apartment units hit the market, the survey said. The vacancy rate is expected to approach 4 percent by year’s end as another 600 units are scheduled to be delivered in Greater Boston through the end of December, researchers found.
By 2015, more than 8,000 new apartment units are expected to be constructed between Boston and the Route 495. As a result, the vacancy rate is expected to remain in the 4 percent range for the next two years, the survey said.
The highest rents are in two downtown neighborhoods: the Back Bay and Beacon Hill, where the average rent is $2,809, a nearly 3 percent increase from the second quarter. Brookline, Brighton and Newton ranked second with rents at $1,944, a 0.6 percent hike over the previous quarter. Overall, Boston rents averaged $1,581 in the third quarter, a one percent hike from Q2, the study found.
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