$1.75 Trillion Global Real Estate Investment In Danger of Declining
As with all things real estate, the $1.75 trillion real estate investment recently reported is in danger of being wiped out. According to Funds Europe, the figure--representing a 4% rise in 2017--could disappear in a fairly short amount of time, real estate services firm Cushman & Wakefield said in an analysis.
The Asia-Pacific region has been in for a strong season, attracting a huge investment amounting to $866 billion. With the way things are going, the region is still expected to earn $875 billion, a 1% increase, in 2019. By comparison, Europe, the Middle East, and Africa (EMEA) have dropped by a substantial amount to a combined $331 billion.
However, as Property Magazine reported, the current investment rise in Asia may soon come to an end. Investors from the region--most notably from the Philippines, South Korea, and Malaysia--may experience a cooldown eventually, as they were new investors in 2018. Singapore was a great source of capital in the region, thanks to their high GDP. However, that may soon end.
China enacted protective policies, which may have affected capital flow into the country. However, this appeared to have affected East Asia too, proving that China holds great sway over the economies of the region. When China's economy is "in trouble" because of the US' dispute with it, the whole region is in deep trouble too.
Other countries might eventually pick up the slack. Japan, Taiwan, and South Korea may be the countries which would hit back on the decline. They are largely similar to Western European countries in that they are good sources for CEE. Their sheer sizes--coupled with the high value of commercial real estate in these areas--may have a huge effect on their markets.
Cushman & Wakefield's David Hutchings seems to have an example of why this may happen, although he described the effect that the current economic trend has on EMEA markets. He said that the environment surrounding the economy was 'weaker' than expected, but the inflation had been weak as well.
The aim is to continue a 'stable, contracted income' so that the real estate market continues to become attractive. By attracting investors, it might also involve a strong demand for the 'product' and supplies. But what is the right product? That's the question needing the right answer if real estate economies will continue to improve from the decline.