No 'hard landing' for global RE industry
January 23rd, 2008
The overall outlook for global real estate investment looks solid despite disruption in the European and North American credit markets, according to LaSalle Investment Management in its 14th Investment Strategy Annual.
The investment specialist believes a global ‘hard landing’ should be avoided as money continues to find its way into real estate and market fundamentals remain strong. It also noted that tighter lending requirements in Western markets would place leveraged investors in a strengthened position to secure deals at better prices.
“There is no doubt that the shutting down of cheap, easy credit will have an effect on real estate markets”, said Robin Goodchild, report co-author and head of the firm’s European research and strategy division. “However, the future offers a return to more leverage and margin levels that will enable those who truly understand the property markets to prosper.”
LaSalle also suggested the construction slowdown, due to tightening credit conditions, will remove the chance of oversupply devaluing current strong property prices.
“We don’t believe markets are heading for an early 90s-style hard landing as there is little risk of over supply, however, the recovery is not likely to be as compelling as 1993/94 either,” added Goodchild. “So prices are not likely to fall significantly”.
Story from www.opp.org.uk
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