However, the picture is not the same across the world. Suburban locations and cities that have been less impacted by lockdowns have experienced stronger rental growth. Across the World Cities Rental Index, 39% of cities reported positive rental growth in the six months to June 2021, this figure stood at 25% in 2020.

The average prime residential yield across the 30 cities is 2.9% in June 2021 compared to 3.1% in December 2020. This is the lowest average yield since Savills began tracking the data in 2005. There is still significant variation in yields across the different world cities, ranging from 1.3% in Shanghai to 4.7% in Moscow.

At the top of the scale, Miami, Moscow, and Dubai recorded the highest levels of rental growth over the first half of 2021.

Miami’s rental market has experienced an increase in demand over the past year from domestic migration, seeing high rental prices and tight supply for single-family homes. New projects continue to come to the market, but have been unable to meet the demand for prime rental properties in the city.

In Moscow, the level of demand observed over the past half year is comparable to the pre-crisis levels seen at the end of 2019 as Russian residents return to the city. After a decline in prime and ultra-prime rents in the second half of 2020, rental prices for these properties are increasing again, especially for large apartments with outdoor space in key areas of the city.

The Dubai market appears to be reaching a turning point after six years of negative rental growth resulting from oversupply in the market. Prime rental prices increased by 5% in the six months to June, driven by a 20% increase in rents for villas as residents prioritise space and shift away from apartment living in the wake of the pandemic.

Locations such as Kuala Lumpur, Hong Kong, New York, and other cities experiencing negative rental price growth have in common the importance of international tenants in their prime rental markets. As travel restrictions have persisted in the last six months, these markets have continued to face rental price falls.

Kelcie Sellers, analyst, Savills World Research, said, “Rental markets look set to be subdued for the rest of 2021 while travel restrictions remain in place in many locations causing rental prices to recover more slowly than the capital values, which are less reliant on international demand.

“Longer term, as vaccinations continue and travel restrictions lift, the outlook is more positive as corporate relocations resume and the increase in tourism means supply from the long-term rental markets can return to the short-term market, lowering available supply.”

According to Chris Orr, Director of Residential at Savills Australia, the decrease of offshore tourism to Australia since Covid has meant that rental markets that rely on students and those with working visas have been significantly affected i.e., Near tertiary education or the beaches where students and tourists prefer to live respectively.

"The pursuit of size has been driven by the need for functional space as more and more are now working from home. This has meant that some rental markets have declined while others performed well as a result of the changing requirements of end users.

"The standout performing assets in Australia over the last 18 months have been houses for both rental and capital growth" he said.

Savills prime residential world cities rental index – ranked by prime rental growth

Source: Savills Research