Monday property news update
Brexit, buying power and an updated outlook for residential and commercial markets
3 minutes to read
We have updated our outlook for global residential and commercial real estate markets in light of the seismic shifts in outlook and sentiment we've seen during the past fortnight.
The outlook for prime residential cities
We expect 20 of our 22 prime global cities to see house prices remain flat or increase in 2021. That's a slight reversal of the trend seen in 2020, when we expect nine cities to end the year with lower prices. Shanghai and Cape Town lead the forecast for 2021 with an expected annual price growth of 5%.
Three broad groups look set to emerge in 2021, writes Kate Everett-Allen. Firstly, those markets where prime prices are expected to rebound, assisted by low interest rates, pent-up demand, tax holidays or because of firm market fundamentals, these include Sydney, Paris, Berlin and Madrid.
Secondly, there are some markets where the pandemic will have little impact on prime pricing, in some cases because growth was already weak and will remain so, such as Buenos Aires.
Finally, there are a handful of markets that unexpectedly saw activity surge in 2020 as residents looked to upgrade to larger properties with more outdoor space, these include Auckland, Vancouver, Geneva, Los Angeles and Miami.
Commercial investors look to neighbours and safe havens
In an update to Active Capital, Victoria Ormond reflects on what the vaccine, the US election and stock market surges mean for commercial real estate investors, plus, we take a closer look at changes in the way global investors are making decisions.
The capital gravity model used in the report is highlighting that global investors are more likely to target safe havens this coming year. The US and the UK are the top forecast destinations for capital, being relatively liquid, transparent, markets.
Near-neighbours, or capital flows intra-regionally, such as within Europe or within Asia Pacific, are also likely to grow. The biggest capital flow predicted for 2021 is from Canada into the US, while Singapore into Australia makes the top ten.
Brexit and buying power
As Britain and the EU continue to thrash out the details of a Brexit deal, Tom Bill looks at the implications for overseas buyers of UK properties.
Savvas Savouri, chief economist of hedge fund Toscafund, tells Tom the pound could rise to $1.70 if a deal is reached in the coming fortnight, from trading at $1.33 on Friday. That would quickly erode some sizable currency discounts that have built up in the four-and-a-half years since the Brexit vote.
The week ahead
Boris Johnson will this week outline the manner in which Coronavirus restrictions will be relaxed “for a small number of days” to allow families across the UK to get together over Christmas.
In Wednesday's spending review, Chancellor of the Exchequer Rishi Sunak will commit to increased spending on infrastructure and public services as he seeks to shore up the UK economy.
Finally, the Telegraph reports that Britain could give regulatory approval to Pfizer-BioNTech’s Covid-19 vaccine before the end of the week.
In other news..
Andrew Shirley's Rural Update, Stephen Springham on retail's pent up Xmas demand, Covid’s Impact on Ski Resorts, the outlook for Europe's data centres, turmoil has only increased Monaco’s attractions, Singapore roars, European nations plan cautious easing of lockdowns, and finally, Nationwide 'open-minded' on low-deposit mortgages.