Real estate predictions, forecasts, and trends 2023

Here we take a look at what trends are predicted across different industries and regions including both commercial and residential outlooks.

The 2023 Commercial Real Estate outlook in Africa

Data centres, ESG considerations, hybrid working and rising economic woes are highlighted as the trends to watch out for in African Commercial Real Estate in 2023.

Boniface Abudho, senior research analyst, highlights some of the factors leading to mixed feelings around the future of Commercial real estate on the continent.

“There were many vacant spaces in the commercial sub-sector, with heightened concerns fuelled by working-from-home patterns, increased inflation, rising unemployment rates, and the on-going devaluation of local currencies.

As 2022 ends, the picture seems to be changing for the better.”

Bonniface paints a positive picture for the commercial sector moving into the new year.

"Overall, Africa is slowly returning to normalcy, and the Commercial Real Estate market has registered growth in 2022. The sector anticipates a better year business-wise in 2023."

Read more here

Strategising the 2023 Asia Pacific landscape

The Asia-Pacific region has seen many of the same issues that real estate markets have seen around the world, including interest rates hikes weighing on sentiment.

Here the team asks the question: what are some of the key investment themes for the upcoming year?

With renewed focus on commercial real estate for investors, the investment landscape for 2023 in Asia sees prime locations and buildings with good ESG credentials top the list of investor requirements.

The major themes highlighted by the research team in Asia-Pacific include:

• Strengthened interest in commercial real estate
• Core liquid assets in prime locations
• Rise of dollar investors
• Dominance of private and sovereign investors.

Similar to what we have seen in Europe, the rise of private investment into commercial real estate is set to be a significant trend in 2023.

With longer horizons and deep pockets, investors are prepared to move quickly to secure prime assets while there is limited competition – especially with private investors being the most aggressive buyers for trophy office assets in the region’s safe-haven markets. 

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The full Asia-Pacific Outlook Report delves into the repercussions of the pandemic, increasing interest rates, and rising mortgage rates on the Asia-Pacific residential landscape using official statistics and outlines the forecast for 2023.

European real estate outlook 2023

Brought to you by our local experts across our European network, we get a high-level summary of the latest news, trends, risks and opportunities in each region.

To get a succinct round up take a look at the video from Judith Fischer, European research, who summarises the outlook with a pan-European overview in 60 seconds.

Judith explains how private capital and Infrastructure investment will play a big part in commercial markets in 2023. 

"We expect private capital to take advantage of reduced competition and other international investors to take advantage of currency benefits to look at a range of CRE across Europe, including those more secondary assets which can be repositioned, at reasonable cost, to a higher ESG benchmark."

"In Europe we are seeing a lot of investment in infrastructure including from railways such as the Fehmarn Belt Tunnel linking Germany and Denmark to water-centric infrastructure projects such as Canal Seine-Nord Europe linking France and Northern Europe."

As a result of these infrastructure investments, long-term logistics opportunities will be available for developers and investors in the new year.

Read more here

UK House price forecast

Following the disastrous mini-budget announcement in September UK house prices, along with the value of the pound were sent tumbling. 

With continued rising inflation, rates were hiked and subsequently the cost of borrowing increased, putting more pressure on households and squeezing mortgage affordability. 

More recently, with new Prime Minister Rishi Sunak at the helm, markets have settled and the pound recovered.

Tom Bill, head of UK residential research, thinks the future of the housing market in the UK will be impacted as a result. 

"Financial markets took fright at the previous government’s low-tax economic plan and borrowing costs spiked by around 150 basis points in anticipation of higher inflation.

We have a new government, but mortgage rates are playing catch up and only declining slowly.

It has created a disorderly picture for the UK housing market at the end of 2022, with a wide range of motivations prevalent among buyers and sellers."

Knight Frank research indicates we will see a decline in UK house prices of 10% over the next two years, with a 5% fall in 2023. 

However, Tom believes that six months from now the outlook for house prices and transaction volumes will properly come into focus. 

Read more here