The underlying macroeconomic fundamentals vouch for yet another strong year on the Global Property Markets

Mr. Richard Barkham, Global Chief of Economics at CBRE, presented an interesting overview of the Global Macroeconomic Indicators during a client seminar at the CBRE Sweden Offices in Stockholm. The economic activity in most countries across the Globe is tagging along at a pleasing rate, resulting in maintained high demand for investments in real properties. Consumers across the globe are the ones pulling the economic development forward, fueled by extremely low interest rates and low oil prices. However, a background buzz of slight uncertainty can be detected and seen from the data – mainly due to the current environment of low oil prices, extremely low interest rates and various QE programmes put in place by central banks. Mr. Barkham’s view is that we are closing in towards the end of the current economic cycle, even if 2016 and 2017 are projected to be years of high economic activity.

The situation is confirmed by capital flows on the Global Property Markets where activity is exceptionally high, Jonathan Hull, EMEA MD of Capital Markets at CBRE, added. Capital flows from Asia and the Middle East towards Europe are projected to maintain high, mainly driven by the delta in yields between Asian and European markets. Low oil prices are affecting the influx of sovereign wealth capital into Europe, however counteracted by the large number of ultra- high net worth individuals from the Middle East. London is still the single most attractive market for foreign capital entering Europe, followed by other major European cities. Recovery from the most recent financial crisis has been strong in Europe, particularly in the countries that were hit the hardest, and signs of overheating of the market can be spotted here and there across the continent, Mr. Hull concluded.

- Commented by Bojan Ticic, Director Capital Markets, CBRE Sweden