Ukraine conflict yet to make its ‘full mark’ on real estate
The Russia-Ukraine war is not only a humanitarian crisis, but a “massive economic shock” that has yet to make its “full mark” on the world of real estate.
This is the warning from PwC and the Urban Land Institute in their annual Emerging Trends in Real Estate report, launched this week at MIPIM.
“A huge release of pent-up demand led to record volumes of investment transactions as economies reopened during 2021. That level of activity never looked likely to be repeated this year,” the report said.
The Russia-Ukraine war is not only a humanitarian crisis, but a “massive economic shock” that has yet to make its “full mark” on the world of real estate.
This is the warning from PwC and the Urban Land Institute in their annual Emerging Trends in Real Estate report, launched this week at MIPIM.
“A huge release of pent-up demand led to record volumes of investment transactions as economies reopened during 2021. That level of activity never looked likely to be repeated this year,” the report said.
“Even before the invasion, industry leaders canvassed for global emerging trends were scaling back their expectations. Central banks, led by the Federal Reserve in the US, had been planning to tighten monetary policy to keep inflation in check, but there is now a question over whether this will continue in Europe. Supply chain disruptions, already a big problem, could get worse.”
PwC and ULI said there are now concerns over whether the “pro-real estate investment criteria” of property as an inflation hedge can last. “The risk is that inflation spirals outside the influence and control of the central banks,” they added.
“The outlook for real estate is not just dependent on the direct effects of Russia’s invasion of Ukraine on global economies, but also on how the conflict will hit confidence among consumers, businesses – or occupiers – and investors. Against those unknowns, property deal-making is expected to slow down, especially in Europe.”
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