Property expert Cushman & Wakefield has revealed that almost £729 billion was committed to property globally in the year to the end of June, excluding development land.
This is 5.7% below a year earlier, and marks the first time that global property investment volumes have fallen in seven years.
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The decrease has been attributed on investors retreated from mounting international risks. David Hutchings, head of European investment strategy at Cushman & Wakefield, believes that the drop is due to increasing worries over factors such as Chinese market instability and the UK’s exit from the EU.
“With risk still elevated but demand high, the question is being asked whether this is a temporary pause or has the market peaked?”
“We’re seeing an increased level of risk aversion compared with a year or two ago. Investors have gone back into their shell a bit. The process began last summer [2015] with the devaluation of the yuan, which made people more worried about what’s happening in China, and built up through European issues such as migration and Brexit, followed by the US elections. Investors are very focused on the best-quality property in the best cities, but there is only so much of that sort of property around,” Hutchings said.
Cushman & Wakefield has reported that the decline in investment volumes was spread across regions and sectors.
Its data also showed that New York had supplanted London as the city attracting most cross-border investment, due to waning appetite for property in the UK capital prompted by high prices and the Brexit vote.
