While investment has tentatively turned a corner, subdued activity and further rises in cap rates mean 2024 will still be a tough year. All-property values are down by 18% from their mid-2022 peaks, but we expect the eventual peak-to-trough decline to reach 25% by end-2025 as pricing continues to adjust. At the sector level, we expect the structural hit to office demand to drive the largest total value decline of around 45%, whereas retail remains the best performing sector over the forecast.
We expect winning metros will mostly be in the South, where demand should benefit from stronger population and employment growth. Meanwhile, the six major markets and west coast metros will underperform thanks to high shares of remote-friendly tech jobs, poor affordability and long commute times.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.