Is that even a thing? Looking at the data[1], there doesn't seem to be any correlation between recessions (areas shaded gray) and rents rising faster than normal.
This recession comes with increased interest rates, and we've had a massive Buy to Let scheme for God knows how many years, where people bought houses on mortgage and rented them out. Rising interest rates = rising mortgages = landlords that have to increase rents to keep earning the same amount.
The point is that the average person gets squeezed from multiple sides, and the higher on the foodchain you are, the more chances you have to outsource your losses.
>Rising interest rates = rising mortgages = landlords that have to increase rents to keep earning the same amount.
And what were the landlords doing before? Leaving money on the table by refusing to raise prices to what tenants were willing to pay? I find that unlikely.
Copying my comment from another thread because that is relevant.
Do you rent? If yes, how much does rent have to increase before you decide, "Ah yes, I would much rather be homeless, but at least I am voting with my wallet, that will show the greedy landlords not to raise rents!"
I personally cannot think of a limit at which I would decide to be homeless. I would much rather have a home to live in than buy any food beyond what sustains me, or get new clothes, or go out for any entertainment reasons. I believe I am not the only one in this. Thus, from a purely economic perspective, the landlord in these cases are "leaving money on the table", i.e. they could capture more of my surplus income if rents happened to increase in a coordinated fashion. Unfortunately, there is nothing in Econ 101 which tells you why that would be bad or unsustainable (social unrest etc.) and thus these concepts will be hard to grasp for people who do not have to live this life.
Suppose the mortgage is 500, and rent 600. 100 profit for the landlord.
If tomorrow the mortgage increases by 200, the rent will have to increase by the same amount to maintain a profit margin of 100.
If you're asking why was the rent "only" 600 and not 800 in the first place, is that your price is affected by demand and supply. If your prices are ridiculous, nobody'll rent from you. But if everyone around is on a Buy to Let scheme and mortgages (thus rents) rise, your tenants will have to accept your rent increase because all supply has become more expensive. No one is leaving money on the table. It's markets 101.
Depends on which country you are in. In germany some popular contracts are bound to inflation index. So rent increases, while employed workers may have to wait with their raises, as companies have to tighten their belts.
Is that even a thing? Looking at the data[1], there doesn't seem to be any correlation between recessions (areas shaded gray) and rents rising faster than normal.
[1] https://fred.stlouisfed.org/series/CUSR0000SEHA (you can use "edit graph -> units -> Change from Year Ago, Index 1982-1984=100" to make changes easier to see)