Prime property valuations steady as risk aversion rises

In light of the changes to our valuation weightings this quarter, many markets are closer to fair value than in our last Valuation Monitor. That said, the majority of property markets (51 out of 93) are still overvalued, with valuations against equities looking particularly stretched. We expect property yield falls to be weak this year and, with bond and dividend yields set to be broadly stable, valuations are unlikely to change significantly.