Manhattan landlords secured the highest number of new leases on record last month, but boy did they have to work hard for it.
According to a new rental report released Thursday by appraisal firm Miller Samuel on behalf of Douglas Elliman Real Estate, there were 6,285 new leases in August in Manhattan, up 5.9% month-over-month, and 1.8% higher year-over-year.
But while this was the highest number since records began in 2008, landlords had to work a lot harder than the usual August, traditionally the busiest month for rentals, by offering sweeteners such as a free gift or rent discounts. As a result, the share of new leases with concessions was 12.1%, up from 7.4% a year earlier.
More:Manhattan Luxury Homes Staying on the Market for Longer
Normally, these sweeteners are less common in August than in other months of the year, as there is a high demand from families before the new school year kicks off, and college graduates start new jobs in the fall. As a result, landlords usually tend to push rents in August.
But they didn’t achieve the hefty rent increases they were no doubt hoping for, as the median rental price in Manhattan in August was $3,399, 1.5% lower than in July, and flat as compared to the previous year.
The main reason for this less-than-stellar news for landlords? A lot more inventory on the market.
Listing inventory was 7,478 in August 2016, the second highest figure on record, and up from 5,357 in August 2015. At the same time, the number of days a property spent on the market was 39, 8.3% higher year-on-year.
"New leasing volume in Manhattan is the highest it’s been in eight years but inventory has expanded faster, which has kept rents in check," said Hal D. Gavzie, executive director of leasing at Douglas Elliman. "In other words, rents are softening but activity remains very high."
It was a similar story in the the luxury sector, defined as the top 10% and where the entry threshold was $6,193. There were a record 629 leases in that part of the market, up 1.5% year-over-year, but the median rental price was 0.5% lower over the same period at $7,861. Concessions were also rife.
More:Tax Talk: Do International Real Estate Investors Have to Pay U.S. Taxes After A Sale?
In fact, the only segment to record price growth was the bottom 30% of Manhattan’s rental market.
"Concessions have been a trend all of 2016 and that’s been a function of more supply. The higher you go in prices, the more concessions you’ll find," added Jonathan Miller, the chief executive of Miller Samuel and author of the report. "The market is softer at the top. This month was no different."
In Brooklyn, which has become much more expensive over the past few years, as droves of Manhattanites moved to the neighboring borough in search of more space for less money, there was also a record number of leases, up 35.8% at 1,495.
However, inventory was also at its highest level, which helped to push prices down 1.9% over the same period to $2,895. It was the same for the luxury sector in Brooklyn, whose entry threshold was $4,771. There, the median luxury rental price was 2.9% lower year-over-year at $5,467.
MORE FROM MANSION GLOBAL: