For rent: An oversupply of luxury units will negatively affect the industry

Operators in the Apartment Rental industry have performed strongly over the five years to 2018, however, industry performance softened in 2017 and 2018 as vacancy increased in those years. Since the subprime mortgage crisis, the industry has undergone structural change. Leading up to the crisis, a majority of investment in real estate was carried out by institutional investors (those who own 10 properties or more), whereas today, a majority of properties for rent are single-investor owned and nonowner-occupied. Historic lows in homeownership, decreasing rental vacancy rates and surging demand for rental units have enabled landlords to increase rents, aiding revenue growth. Therefore, IBISWorld expects industry revenue to climb over the five years to 2018...purchase to read more.

Industry Statistics & Market Size
Revenue
$154bn
Annual Growth 13-18
2.4%
Forecast Growth 18-23
Profit
Employment
769,588
Businesses
518,271
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • An oversupply of luxury units is expected to increase vacancy and diminish landlords’ comparative pricing power
  • More consumers today are opting to rent apartments rather than purchase homes or porperty
  • Industry participation is expected to continue growing, albeit at a slower rate
  • Industry Report - Industry Products Chapter

    The Apartment Rental industry is composed of players acting as lessors of buildings used as residences or dwellings, including apartment buildings, single-family homes and townhomes. Owner-lessors are included in this industry, as are companies and individuals who rent property and then act as lessors in subletting the space to others.Apartments are rental units situated within buildings or complexes with five or more units, while the townhome segment of the industry includes properties with two to four units. The single-family home sector is made up of traditional houses and leasable manufactured or mobile homes.Rental units are generally differentiated by type, style, size and location. Uni...purchase to read more.

    Additional Insights for the Apartment Rental Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Apartment Rental Industry are

  • Financial structure of the company
  • Management of a high-quality assets portfolio
  • Superior financial management and debt management
  • IBISWorld analysts also discuss how external factors such as Rental vacancy rates and National unemployment rate in the Apartment Rental industry impact industry performance..

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    What's in this report

    What is the Apartment Rental Industry?

    Operators in this industry act as lessors of buildings used as residences or dwellings. Industry participants are owner-lessors of residential buildings and establishments that rent real estate and then act as lessors by subleasing it to others. In addition to apartment rentals, the industry also includes single-family homes and town houses.

    Industry Products
  • Rental of one-unit structures
  • Rental of two- to four-unit structures
  • Rental of five- to nine-unit structures
  • Rental of 10- to 19-unit structures
  • Rental of 20- to 49-unit structures
  • Rental of 50- or more unit structures
  • Rental of manufactured homes, mobile homes or trailers
  • Industry Activities
  • Renting or leasing residential buildings
  • Renting or leasing residential dwellings
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Rental vacancy rates
  • National unemployment rate
  • Homeownership rate
  • Yield on 10-year Treasury note
  • Urban population

  • Current Performance
  • Dynamics of demand
  • Demographics of demand
  • Industry structure
  • Slow down ahead
  • Chart: Revenue Growth

  • Industry Outlook
  • Deceleration in participation
  • Favorable demographics
  • Increasing supply and competition from housing
  • Table: Apartment Rental Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Apartment Rental Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Finance and Insurance
  • Retirement & Pension Plans

  • Key Selling Industries
  • Construction
  • Finance and Insurance
  • Landscaping Services
  • Property Management
  • Real Estate Sales & Brokerage
  • Utilities

  • Products & Services
  • Rental of one-unit structures
  • Rental of two- to four-unit structures
  • Rental of five- to nine-unit structures
  • Rental of 10- to 19-unit structures
  • Rental of 50- or more unit structures
  • Rental of 20- to 49-unit structures
  • Rental of manufactured homes, mobile homes or trailers
  • Chart: Apartment Rental Industry Products and Services Segmentation

  • Demand Determinants
  • Demographics
  • Urbanization
  • Housing market
  • Economic conditions

  • Major Markets
  • One person
  • Two persons
  • Four or more persons
  • Three persons
  • Chart: Major Market Segmentation for the Apartment Rental Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitDepreciationWagesPurchases and marketingRent and utilitiesOther
  • Chart: Cost Structure Benchmarking – Sector vs Apartment Rental

  • Basis of Competition
    InternalExternal
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Apartment Rental Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    Capital Intensity
  • Chart: Level of Capital Intensity for the Apartment Rental Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Apartment Rental Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Rental Vacancy Rate (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Table: Industry Financial Ratios
    Dwelling
  • Another name for an apartment or home.
  • Funds From Operations
  • Funds used to define cash flow from operations for REITs that are calculated by adding depreciation and amortization expenses to earnings.
  • Leadership In Energy And Environment Design (Leed)
  • An eco-oriented building certificate program established under the US Green Building Council. LEED-certified buildings are energy-efficient and green certified.
  • Occupancy Rate
  • The amount of occupied real estate space as a percentage of total available space.
  • Real Estate Investment Trust (Reit)
  • A legal entity that uses pooled investor capital to purchase and manage income property or mortgage loans. To qualify as an REIT, the entity must distribute at least 90.0% of taxable income.
  • Rental Agreements
  • An agreement with no set period of occupancy in which landlords and tenants are free to make changes to the contract at the end of each 30-day period.
  • Vacancy Rate
  • The amount of unoccupied real estate space as a percentage of total available space.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s industry research report on Apartment Rental can be used to help you understand the industry’s market size, growth potential and major companies. Five-year forecasts provide insight into the industry’s prospects, so you can make decisions with confidence. This information is perfectly suited to informing your business plans, pitch books, benchmarking and SWOT analysis.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Apartment Rental:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Apartment Rental market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Apartment Rental, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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