The global real estate rebound is under threat
A less positive economic outlook and rising downside risks are threatening the global real estate recovery. Our baseline forecast is for global all property returns to grow by 7.6% pa over 2022-2023. But risk-adjusted returns are weaker, at 7.3% pa, based on the weighted-average of all risk scenarios.
What you will learn:
- The biggest risk to the real estate cycle is inflation, which in our return of inflation risk scenario lowers all property performance to 4.4% pa.
- Prolonged supply-chain disruptions are seen as the greatest risk by our real estate clients.
- Conversely, under a consumer boom scenario, all property returns jump 2.4ppts above the baseline.
Easing financial conditions offer CRE some respite
Our measure of financial conditions has become less restrictive in the US and started to loosen in the eurozone and the UK, reflecting investors' expectations that interest rates have peaked. This should aid the outlook for commercial real estate (CRE) on the margins, although the scale of past rate hikes, sluggish economies, and structural headwinds mean the sector still confronts challenging fundamentals.Find Out More
Eurozone key themes 2024 – A fragile recovery will gain impulse
After a year of stagnating activity, the eurozone economy will continue to struggle to gain traction in the near term given multiple headwinds. But we expect a gradual recovery in 2024 that will gather momentum as consumers regain some of their lost purchasing power and financial conditions ease.Find Out More