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U.S. multi-housing expansion continues

Global Market Perspective, November 2019

The U.S. multi-housing expansion continues, with the national vacancy rate reaching a new cyclical low of 3.7% during the third quarter. The strong summer housing season propelled the market, with robust net absorption overcoming what continues to be an elevated development pipeline. The lack of affordable for-sale housing, coupled with favourable demographics, keeps providing a deep pool of renters. Strong demand should keep market fundamentals stable, if not improving, over the near term.

Global Residential Clocks – Rents

 

Investment demand remains solid in Europe

Investment activity in the institutional residential market in Europe remains strong following a robust 2018. Third-quarter volumes rebounded in Germany following a relatively weak first half, while demand remains solid in France, Spain and the Netherlands. The UK also saw activity pick up during the third quarter despite uncertainty impacting the wider residential market. Rent control regulation has come into effect in a number of markets during 2019, though investors are still assessing the impact of these policies in several countries.

Uncertainty and policy impacts restrain price growth in many Asia Pacific markets

In Asia Pacific, buying activity remained steady despite broader macroeconomic uncertainty, while mixed leasing demand and policy impacts restrained price growth across the region. Prices in Shanghai remained stable during the third quarter due to the price cap policy despite a significant increase in high-end sales following on from an influx of new launches. Hong Kong’s luxury prices lost their recent momentum, sliding marginally in Q3s. Capital values for Singapore’s prime properties edged up; however, an abundant supply pipeline, the effects of recent cooling measures and deteriorating global conditions are expected to dampen further price growth.