Prime rental markets around the world are beginning to cool after a post-pandemic surge, according to Knight Frank’s latest global rental index — but London continues to defy the trend with sustained demand and high rents.
Across a basket of 16 major global cities, annual rental growth slowed to just 2.2% in the final quarter of 2024 — the lowest rate recorded in over three years. The data suggests the global repricing cycle that followed Covid-19 is now tapering off, particularly in developed urban centres.
Leading the rankings is Tokyo, where prime rents rose by 6% over the year, driven by growing demand and a slow-moving supply pipeline. In contrast, Toronto, Auckland and Singapore all experienced falling rents throughout 2024, as supply caught up with pandemic-fuelled demand spikes.
Despite the recent slowdown, the rental market has seen significant growth since the end of 2020. Prime city rents have climbed 28% globally over that period, with key markets like London and New York seeing increases well above 50%.
Knight Frank’s global head of research, Liam Bailey, said: “The upward repricing of prime global residential rents has worked its way through the system in most major markets. With wage growth and affordability stretched, we expect rental growth to remain positive but to sit below trend this year.”
Bailey added that while short-term rental growth may remain subdued, long-term pressures will continue to push rents higher. “Over the longer term, we are likely to see a return to stronger growth as demand requirements continue to outpace the supply response.”
In the UK, the capital’s rental market has been under intense pressure, fuelled by constrained supply, population growth, and reduced buy-to-let activity. Despite signs of moderation globally, London landlords continue to command high rents, particularly in prime central and outer boroughs.
The report signals a potential easing of the rental surge that followed the pandemic — but for tenants in global hotspots like London, relief may still be some way off.
