Global Real Estate Records Strongest Quarter in Q1 2022, Investors Still Favour Cross Border Real Estate Despite Deglobalisation Forces

Global real estate markets had a remarkably positive start to the year. Diminishing operational uncertainty, robust demand and abundant liquidity spurred a flurry of activity and allowed Q1 2022 to be the most active first quarter on record at US$292 billion. Of which, private investors represented more than 43% of volumes – a record share of activity.

Despite the robust investment market conditions during Q1, the markets face renewed headwinds as a result of elevated inflation, geopolitics and rising interest rates. These difficulties have created deglobalisation pressure. However, a study by MSCI showed that the world’s largest institutional investors still favours allocating capital to overseas markets, particularly to liberal democracies with transparent real estate markets like Australia, UK, and US.

What caught our eyes this month?

Global Real Estate Perspective May 2022

JLL – Global real estate markets had a remarkably positive start to the year, with an ongoing recovery in occupier market take-up, and capital market investment volumes setting a new high in Q1. Effects from the pandemic are now waning (except in China), but other headwinds have emerged including high and rising inflation, tightening monetary policy, and mounting geopolitical risk created by the war in Ukraine.

Vacancies Nudge Higher but Rental Market Still Tight

The Urban Developer – According to the latest report from SQM Research, the national residential property rental vacancy rate edged fractionally higher in April—rising to 1.1 per cent. Meanwhile, over the past month, capital city asking rents have jumped nationally with the 12-month increase now standing at 13.8 per cent.

Real Estate Has Bucked the Deglobalisation Trend

MSCI – Political populism, the COVID-19 pandemic and increased geopolitical tensions have all contributed to concerns about deglobalisation. However, the demand for international real estate remains resilient. Surveys of investor intentions show continued strong demand for cross-border investments among the world’s largest institutional investors.

Winim Taking Mystery Out of Premium Property Investment

The Urban Developer – Beyond investment options such as owning rental property, flipping houses or investing in property indirectly through the ASX, there are alternative ways for qualified investors to invest in the real estate sector, which remains a good hedge against inflation and one of the most reliable ways to build long-term wealth.

Federal Reserve Announces Biggest Interest Rate Hike Since 2000

The Guardian – The Federal Reserve moved to tamp down soaring inflation in the US, announcing the sharpest rise in interest rates in over 20 years. The Fed’s benchmark interest rate was raised by 0.5 percentage points to a target rate range of between 0.75% and 1%.

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