Following a rocky 2018, global real estate consultancy JLL reported this week that investment in global commercial real estate cooled in the first half of 2019, with year-over-year volumes falling by 9% to $341 billion. sale qatar
All three regions behaved differently, with activity dropping in EMEA and the Americas, while Asia Pacific set a new first-half high of $86 billion.
Investor confidence is being impacted by structural changes in the retail sector, as well as ongoing political and economic instability.
Risk-free yields, on the other hand, continue to fall, lowering borrowing costs and widening property spreads at a time when buyers are looking for yield more than ever. Despite the fact that prices have risen in many global markets, fundamentals remain strong, underwriting is disciplined, debt levels are generally low, and investors are still interested in the sector, according to JLL.
According to JLL, funding by private closed-end real estate funds reached an all-time high of $80.3 billion in the first half. Meanwhile, dry powder continues to rise, reaching a new high of $331 billion. Managers are finding it difficult to deploy resources in a world where costs are rising as the current cycle continues.
As investors continue to adapt to the overall global economy, JLL expects investment to decline by approximately 5-10 percent in the second half of 2019, to around $730 billion for the full year.
In Q3, global home price growth slowed to a six-year low.
Hungary, Luxembourg, and Croatia have the highest average home price increases.
Home prices are increasing at an annual rate of 3.7 percent on average across 56 countries and territories, according to global real estate consultancy Knight Frank. This is the index's slowest growth rate in more than six years. This trend can be seen in both the standard and prime segments of Knight Frank's other global city indices.
Hungary leads the index this quarter with 15.4 percent annual price rise, fuelled by a strong economy (4.9 percent GDP growth expected in 2019*), low mortgage rates, high wage growth, and a variety of government subsidy programs, according to the most recent available data.
Other previous frontrunners from the last two years, such as Slovenia (18th), Malta (22nd), and Iceland (26th), have cooled significantly, owing to weaker economic landscapes, affordability issues, or a drop in tourism.
Some countries and territories, on the other hand, are climbing the rankings. Greece was ranked 24th a year earlier, with a price increase of 2.4 percent. While prices are still 37% below their 2008 high, they are now increasing at a 7.7% annual pace, putting Greece in 12th place out of 56 countries and territories.
This fifth, European countries account for seven of the top ten rankings, with the majority of them being in Central and Eastern Europe. Prices are growing from a low base, economies are improving, and borrowing rates are near historic lows.
On a global scale, Russia and the Commonwealth of Independent States (CIS) are at the top of the rankings, with an average annual growth rate of 5.7 percent - prices in Russia are up 8.1 percent over the past year, and Ukraine has risen from the bottom of the rankings to now have an annual growth rate of 3.3 percent.
Knight Frank publishes two mainstream price indices: the Global Residential Cities Index (150 cities) and the Global House Price Index (country level). Two main patterns emerge from a study of the two indices. First, how much national house prices lag city markets by around six months, and second, how much the output gap between the two has narrowed since 2018.