Of the 20 most traded cities in the world, there is only one German city: Berlin.
Higher interest rates and higher inflation rates have caused investors to be cautious in major European real estate markets in the second quarter of 2022. Due to strong capital inflows in the first quarter, investment volume in the first half of the year was US$155 billion, an increase of three percent over the same period last year. This emerges from the “Global Real Estate Perspectives” report by JLL, for which nearly 100 real estate markets around the world were analyzed.
Markets in the Asia-Pacific region were even weaker. Transaction volume there declined 17 percent to US$71 billion in the first half of the year. However, pipelines in the two main Asian markets, China and Japan, are expected to recover in the second half of the year. “Japan could be particularly attractive to foreign investors as the yen remains at a 24-year low against the dollar,” said Hella Hinrichs, senior director of JLL EMEA Research and Strategy.
In contrast, real estate markets in North America were much more dynamic than those in Europe and Asia. There investment volume increased 42 percent to US$340 billion. This means that Canada and the USA will account for about 60 percent of global sales of US$566 billion in the first half of 2022.
The markets in Great Britain and Germany are particularly responsible for weak transaction volumes in Europe. On the other hand, in France, there was a significant increase in activity in the second quarter (21 percent over the previous year), and medium-sized European markets – notably Belgium, Finland, Spain, Denmark and Italy – also registered growth. .- 2/2 –
Globally, however, US metropolitan markets dominate the activity. Twelve of the 20 largest real estate markets are from the United States alone. Los Angeles ($20.6 billion) is at the top, ahead of New York ($19.1 billion) and Dallas ($17.5 billion). The largest European market is London with a transaction volume of US$13.9 billion. Berlin is the only German city to make the top 20 and ranks 19th with US$6.1 billion.
JLL expects uncertainty around pricing to ease investment activity in the third quarter. “Some investors will wait and see where the price level goes down,” Heinrichs says.
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