Valuations near turning point as property yields spike

Despite a sharp rise in property yields, renewed increases in alternative asset yields led to a further deterioration in European property valuations in Q3. All markets were overvalued except for Istanbul, where sharp falls in Turkish government bond yields pushed scores into undervalued territory. However, with alternative asset yields falling so far in Q4 and expected to decline significantly further in 2023, valuations should soon begin to improve given property yields are also forecast to continue rising.