UBS report signals new cycle for European real estate markets
According to a report released by UBS on Thursday, European real estate markets are entering a new investment cycle.
The report indicates that key indicators, such as investment volumes, are beginning to stabilise, suggesting a potential bottoming out after a period marked by inflation and rising interest rates.
"A new cycle starts," UBS stated, highlighting signs of recovery in the market.
The report highlighted that the United Kingdom saw a notable 6.5% growth in real estate investment volumes quarter-on-quarter in Q2 2024.
This contributed to an overall 1.6% growth in the European real estate market.
Conversely, the eurozone faced a 1.9% contraction due to slower adjustments in property valuations.
However, UBS expects this gap to close soon, noting that "investment volumes show signs of bottoming out" as the market continues to stabilise.
UBS noted that risk-adjusted yields have improved as inflation begins to ease and interest rates stabilise, creating a more favorable environment for investment.
The German residential market, in particular, is showing signs of stabilisation, reflecting these improving conditions.
"Risk-adjusted yields have improved," the report emphasised, pointing to easing inflation and stabilising interest rates as key factors.
However, the report also pointed out some challenges in specific sectors.
"Weaker leasing fundamentals in low-quality office spaces continue to drive upward pressure on yields," UBS stated, indicating that while the broader market shows signs of recovery, certain segments, particularly low-quality office spaces, still face headwinds.
UBS's analysis points to a new growth phase for European real estate markets, though the outlook varies across different regions and sectors.
As inflation eases and interest rates stabilize, these factors are helping set the stage for a potential market recovery.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
ChatGPT Sets SHIB Price For December 1, 2024
Experts Say These 3 Cryptos Under $0.5 Could Deliver 10000x Returns, It’s Not Shiba Inu Or Dogecoin