Cities and the Global Economy

July 19, 2021
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Cities 

An interesting piece in the Washington Post reveals rents are spiking across scores of US cities as the economy reopens and Americans "flock back". There's a lot to unpack - millennials and Gen-Z renters are returning after spending the pandemic with family and friends, baby boomers have been selling up and renting following record gains in house prices, plus those able to work from anywhere are continuing to move to smaller cities. 

Zillow data covered in the report reveals San Francisco and New York City are among only a handful of cities where the typical rent price is still below pre-pandemic levels, though both cities are now seeing rebounds. Jonathan Miller's latest housing notes reveals there were 9,642 new leases signed in Manhattan during June, the highest number since 2008. 

We talked last month about corporate America calling its workers back. There is still some way to go - about a third of office workers are back in large buildings according to security company Kastle Systems -  but it’s clear what once looked like a great reset is going to be something much more tame. 

It's early days but there are similar signs in London. The number of weekly enquiries to Knight Frank’s corporate relocation team reached its highest level since September at the end of June. The strongest monthly rental value growth recorded in June was around London's financial districts, most notably in Aldgate (+3.5%), followed by 1.2% in Wapping. 

The global economy

Another eye-popping inflation report from the US shows consumers prices are rising at the fastest pace for 13 years. The reading will reignite the debate over surging prices and whether they really will subside following the initial burst of economic activity as economies reopened - as the Fed and other central banks have been arguing for several months.
 
The Biden administration quickly pointed out that much of the move was tied to temporary supply issues. A surge in the price of used cars accounted for more than a third of the increase, for example.
 
Meanwhile, the latest Chinese exports data flies in the face of growing fears the global recovery is slowing - we touched on that in Monday's note. Exports rose by 32.2% compared with the previous year, beating forecasts for a 23% improvement.

The Global Buyers Survey 2021 - We’d love to hear your thoughts

What we want from a home has changed as a result of Covid-19. To deliver the best service to our clients we are keen to understand how buyers’ attitudes and priorities have changed looking forward. Is a home office and outdoor space now a must have for most buyers? Are more people looking to purchase a second home? Are wellness and sustainability rising up buyer agendas?
We’d love to hear your thoughts on this via our Global Buyers Survey. 

In other news...

Bloomberg on new homes sales in London, Biden's tax plans and the outlook for Ireland, why the global growth scare is a false alarm, Slaughter and May trials flexible working schemes with junior lawyers, American Airlines sees first positive cash flow since the onset of the pandemic, and finally, UK banks to start paying dividends again. 

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