Prime global residential rents are struggling to achieve growth, according to Knight Frank, which reported that its Q2 2015 Prime Global Rents Index has only increased by 0.2% in the past 12 months, which is the slowest growth rate since Q1 2010.

Kate Everett-Allen, residential research at Knight Frank, says: “Despite the index’s muted growth, 10 of the 18 cities tracked by the index saw rents rise during the 12 months to June 2015.

“Cape Town leads the rankings with prime rents ending the year to June 10.2% higher. A shortage of rental stock coupled with the introduction of tighter credit regulations has led to a spike in (rental) demand.

“Although sales markets in cities such as Singapore, London and Nairobi are pausing for breath (in most cases due to policy intervention be it via taxes or mortgage regulation) the commonly-held perception that prime rental markets will, in contrast, start to accelerate isn’t holding true.

“Instead, the performance of our Prime Global Rental Index closely mirrors global GDP and with sluggish growth considered ‘the new normal’ the heady days of 5% annual growth look unlikely to be repeated for some time.”