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Wednesday, September 01, 2021 1:03:43 PM
Investors purchased $87 billion in homes in the first half of 2021, according to real-estate company Redfin, including a record 68,000 houses in the second quarter.
Since June, Blackstone Group Inc., Invesco Ltd. and Goldman Sachs Group Inc. alone have committed more than $11 billion to the sector. Meanwhile, other companies are building rental homes from scratch. New houses meant to be rented instead of sold account for about 12% of single-family construction in 2021, said Doug Ressler, a researcher at Yardi.
Tricon Residential Inc., a publicly traded house owner, reported new lease rent increases of around 21% in July, a record for the company. The average increase was 5% for renewal tenants. In an August earnings call, Gary Berman, Tricon's chief executive, said in some markets, the company could fetch close to 10% rent increases for existing tenants if it didn't intentionally "hold back."
Tricon launched a $5 billion fund this summer to acquire 18,000 more houses and convert them into rentals. It is also purchasing new construction homes through a separate venture. "What we tell prospective investors is look, we can't satisfy the demand. We need a lot more supply," Mr. Berman said.
Deep-pocketed investors may have a hand in would-be buyer woes: one in six home sales went to an investor in the second quarter of 2021, according to Redfin."
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