All-property values are down by 10% from their mid-2022 peaks, but we think there is still another 15% to come by the end of 2024. Much of that price fall will be driven by a rise in cap rates in response to higher interest rates. But, due to the structural changes affecting offices, we expect total peak-to-trough falls in that sector to exceed 35% and, importantly, we don't expect those losses to be regained any time soon.
At a metro level, the relative winners over the coming years will be in the South, where all property types stand to benefit from stronger population and employment growth. But the big losers will be the six major markets and many on the West coast, thanks to poor affordability, long commutes and rising crime.
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