Research Briefing | Nov 26, 2021

Global | Real estate is not a hedge for this type of inflation

Real estate is not a hedge for this type of inflation

The received wisdom that real estate is a good inflation hedge is an oversimplification. This is revealed by our two plausible high inflation scenarios for the year ahead utilising the recent integration of real estate markets into the Global Economic Model.

What you will learn:

  • Our baseline sees inflation as partly relative demand driven and so real estate returns are set to bounce back in 2022, as activity and employment are important short-term drivers.
  • Our analysis demonstrates that real estate is a good hedge against further demand driven inflation, but not against the cost push inflation that it is arguably the bigger threat today.
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