The stage is set for a perfect storm of rental inflation

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Brace for a housing market nightmare as the repercussions of a “trickle-down” effect reverberate across the rental sector, leaving high middle-income families priced out of homeownership and flooding the rental market in droves. With low rental vacancies and a fresh pool of high earners competing for limited units, the stage is set for a perfect storm of rental inflation.

This crisis is the culmination of a decade-long cocktail of near-zero interest rates (ZIRP) and easy money policies, compounded by underbuilding in response to the 2008 housing crisis. While the intention was to avoid a repeat of the 2008 crash, the current situation may prove even more dire.

A chronic under supply of housing, coupled with misallocated resources, paints a grim picture of a market in turmoil with no end in sight. The consequences are dire, with rental inflation spiraling out of control and exacerbating economic disparities.

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