Tighter Eurozone financial conditions and rising fragmentation risks
Eurozone financial conditions have tightened abruptly since the start of the Ukraine war, supporting our caution on near-term growth. Unless the chances of a quick resolution to the conflict rise, we think conditions will remain pressured in the near term and may even tighten.
Financial conditions are also becoming more heterogenous, with countries in South Europe looking vulnerable. Greece, Italy, Spain, and Portugal have so far seen the largest increases in government bond yields, and the ECB’s accelerated QE tapering will continue to put upward pressure on spreads. But we still expect spreads to remain contained at relatively low levels.
Download our report to learn:
- Whether further tightening is likely
- When we think the ECB will first hike rates
- Which countries we think will be most affected by the changes
Embedded inflation could significantly erode property values
Downside risks to our near-term outlook for global real estate are mounting, as the global economic outlook has continued to deteriorate over the past three months. Under our baseline scenario, global all-property total returns are expected to average 5.2% pa over 2022-2024, 2.2ppts below our June forecast. However, if inflation were to become embedded, as is the case in our high inflation regime scenario, this would knock returns to 2.1% pa.Find Out More
Asia: Land values set for largest decline in over a decade
Land values across Asia Pacific are coming under increasing pressure as developers look to preserve margins.Find Out More