Global realty deals to sink 30%, but Asia positive
The slowdown in the realty market is now crossing borders and has gone global, thanks to the US sub-prime crisis. After a record year in 2007 for direct real estate investment globally, with volumes up eight per cent at $759 billion, the realty investment market internationally is expected to go down by 30 per cent this year, says a report ‘Global Real Estate Capital’ by real estate consultancy Jones Lang LaSalle.
While the Americas and European investment markets will certainly see a material decline in full year volumes, Asia (including India and China) may be more resilient though volumes will not achieve the heights of 2007, says the report.
“Reduced debt availability and investor confidence are likely to be here to stay for much of the first half of 2008 as the impact of the debt squeeze continues to ripple through markets, and central bankers and financiers work to stabilize and stimulate the debt markets,” says Tony Horrell, international director and head of European capital markets, Jones Lang LaSalle.
However, despite the downturn in some major real estate markets in the second half of 2007, and the effects of the weakening US dollar, capital flows continued to pour into Asia. Direct commercial real estate investment reached a record $121 billion in 2007, up 27 per cent on 2006. The region has a 16 per cent share in global realty trade volumes.