Infographic: Key macroeconomic risks impacting global real estate performance

Continued economic growth will help stabilise commercial real estate yields and values before pricing slowly begins to recover next year. We expect global all-property total returns to average 5.3% per year over 2024-2025 in our baseline scenario.

However, there are still upside and downside risks that real estate professionals should watch out for. In this infographic, we outline these risks and their impacts on property value.

What you will learn:

• The most significant risk to property returns remains a scenario in which higher interest rates trigger sharp falls in stock markets and house prices, significantly tighter credit conditions, and several years of subpar growth.
• Escalation in Israel-Hamas war remains to be a downside risk. Over the next two years, the Asia-Pacific region would record the most severe drop in values, followed by the US. Office would likely record the largest drop on average.
• Geopolitical tensions are front and center in our increased China-Taiwan tensions scenario. We assume a decoupling of trade and technology starting in Q3 2024 through an increase in trade barriers against China and a shutdown of the transfer of knowledge.