Real Estate Outlook – Global, Edition September 2022

Adjusting to higher interest rates

Real estate 22 Sep 2022 8 min read
Fergus Hicks
Real Estate Strategist

Global real estate performance was strong in the first half of the year, though investment activity eased from a record high in 2021. We expect some rises in yields in the second half as they adjust to higher interest rates and a weaker economic outlook.

Fergus Hicks, Real Estate Strategist

Concerns over the economy and outlook intensified in June as the Federal Reserve (the Fed) opted for its first 75bps rise in US interest rates in 28 years, following it with another 75bps rise in July. With inflation near double-digits in many countries, other central banks around the world also implemented super-sized rate hikes beyond the standard 25bps of recent times. The Bank of Canada even opted for a 100bps rise in July. The monetary authorities are scrambling to bring inflation back under control and more interest rate rises are expected, along with a reduction in central bank balance sheets.

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