Filtered by Region: Europe Use setting Europe
Overview – A weak economic outlook underpins our view that prime rent growth will continue to slow in Europe next year. At the same time, valuations remain stretched and the pace of recent yield rises suggests it is too early to call the bottom in prices. …
8th December 2023
Overview – Inflation and interest rates will fall across Central and Eastern Europe (CEE) in 2024 and an economic recovery is likely to take hold across the region. But the task of bringing inflation back to central banks’ targets will take time and we …
7th December 2023
Overview – With higher interest rates taking longer to percolate through the economy, we now think the recession will be shallower and GDP growth will stay weak throughout all of 2024. It’s a softer landing for the economy, but the runway is longer. And …
5th December 2023
Overview – Property yields rose further in Q3, but with risk-free rates now falling back, we think they will peak by the end of 2023. That will help stabilize capital values, but, given historically narrow yield spreads, we doubt we will see much yield …
24th November 2023
Overview – Surprisingly resilient demand, high inflation, and limited supply mean a severe drop in house prices will be avoided. With the peak in mortgage rates now behind us and the labour market in good shape, there is no clear trigger for another …
21st November 2023
Overview – With economic activity weakening, we expect rental growth to continue trending downwards over the next year. At the same time, valuations remain stretched despite property yields continuing to rise at a steady pace. As a result, we have …
4th October 2023
Click here to read the full report. Overview – Russia and Turkey have outperformed the rest of the region this year amid support from loose policy, but both economies look set for a slowdown in 2024 while recoveries take shape across Central and Eastern …
28th September 2023
Overview – We expect the euro-zone economy to struggle over the next 18 months, and a mild recession in the coming quarters looks more likely than not. Lower energy prices and improved global supply chain conditions should keep headline inflation on a …
27th September 2023
Overview – A slower fall in core inflation than in the US or the euro-zone will mean that the Bank of England keeps interest rates on hold at the probable peak of 5.50% for longer than the US Fed or the ECB. But our non-consensus forecast that higher …
18th September 2023
Overview – After a brief respite earlier this year, property yields are once again on the rise, driven by a further increase in gilt yields. We don’t expect a repeat of the surge seen last year, but we also think any compression beyond this year will be …
21st August 2023
Overview – Our forecast that the Bank of England won’t start cutting interest rates until the second half of 2024 means mortgage rates are likely to stay between 5.5% and 6.0% for the next 12 months. That will price many buyers out of the market, and …
4th August 2023
Overview – The slowdown in rent growth at the start of this year is likely to persist given the weak economic backdrop. And although the property price correction has slowed, we think stretched valuations will push yields higher and drive further …
3rd July 2023
We continue to expect risky assets to struggle over the second half of this year, as major developed market (DM) economies slip into recessions. Meanwhile, we think DM sovereign bonds will rally; that’s partly due to safe-haven demand, and partly because …
26th June 2023
Click here to read the full report. Overview – Downturns in activity are bottoming out in Emerging Europe, current account deficits are narrowing and disinflation has taken hold across the region. But the road ahead still looks challenging. We expect GDP …
21st June 2023
Overview – We expect the mild recession in the euro-zone to drag on for the rest of the year. The drop-back in energy prices will provide some relief for households and companies but will be partly offset by governments withdrawing policy support. …
Note: We’ll be discussing the UK’s economic, housing market and policy outlook in light of the BoE’s June rate decision in an online briefing on 22nd June at 10:00 EDT/15:00 BST . Register now . Overview – As the UK’s recent problem of higher inflation …
19th June 2023
Overview – Higher-than-expected core inflation means interest rates are now set to be higher for longer and we still think the economy will enter a mild recession later this year. That’s not a great backdrop for commercial property and yields will need …
30th May 2023
The recent resilience in economic activity and stubbornness of inflation is raising market rate expectations, gilt yields, UK equities and the pound. And there is a growing risk that interest rates rise above 4.50% and/or stay high for longer. But we …
26th April 2023
Overview – While house price declines have slowed and economic activity has proven more resilient than expected over the three months since our last Outlook , we are sticking to our forecast that house prices will fall by 12% in total. Persistent core …
Overview – Property values fell sharply in Scandinavia and Switzerland last year, but with valuations still stretched and financing set to remain challenging, we think yields will climb higher. And with economic activity weakening and supply increasing, …
4th April 2023
Overview – Emerging Europe has seen less steep falls in values than elsewhere so far, but will not be immune in 2023. Higher interest rates and economic weakness mean these markets will have a challenging year and recent financial disruption only …
31st March 2023
Table of Key Forecasts Global Overview – The strongest headwind for the global economy has shifted from an energy crisis and the related squeeze on real incomes to a potential banking crisis and associated drag on credit. Since banks are relatively …
30th March 2023
Overview – There are encouraging signs that the energy crisis is receding, the worst of the downturn is passing and that inflation has peaked across the region, but this year will still be challenging. We expect below-consensus GDP growth in most …
While CPI inflation will fall from 10.4% to around 3.5% this year, we think a recession involving a peak-to-trough fall in real GDP of around 1.0% is needed to ensure that domestic price pressures weaken to levels consistent with the 2.0% inflation …
28th March 2023
Overview – The euro-zone economy is set to perform much worse than consensus forecasts suggest over the next two years, with a recession looking likely. That is mainly because monetary policy and bank lending conditions are tightening. We expect …
Click here to read the full report Overview – With valuations still highly stretched and rent growth likely to slow as the region falls into recession, we think capital values will fall further in 2023. While the 4.5% decline forecast at the all-property …
24th March 2023
Overview – The surge in yields seen in 2022 will not be repeated in 2023. With much of the repricing occurring last year we think all-property equivalent yields will see only a modest rise of 30bps this year. But rents will be hit, as the dual drags of …
24th February 2023
While an improvement in appetite for risk has fuelled a strong start to 2023 by UK equities and sterling, we doubt this will remain a source of support as recessions in the US, the UK and the euro-zone economies take hold. We anticipate the FTSE 100 …
30th January 2023
Overview – 2023 will be the most difficult year for the housing market since 2008. Mortgage rates remain very high by the standards of recent years and can’t drop materially until the Bank of England shifts from raising interest rates to cutting them. …
26th January 2023
Click here to read the full report. Overview – We think the euro-zone is now at the start of a recession, driven by high inflation, tightening financial conditions and weak external demand, and anticipate two quarters of contraction followed by a gradual …
19th December 2022
Click here to read the full report. Table of Key Forecasts Global Overview – We continue to expect the world to slip into recession in 2023 as the effects of high inflation and rising interest rates are felt. Our forecasts are below the consensus across …
Click here to read the full report. Overview – Property values in Scandinavia and Switzerland have taken a hit as yields jumped in recent quarters. With valuations still stretched, we are forecasting a further 50bps and 30bps of rises at the …
16th December 2022
Click here to read the full report. Overview – Property yields have risen on the back of higher interest rates and have started to drag materially on values. We expect this to continue in 2023, as valuations are still highly stretched. Given downgrades to …
14th December 2022
Overview – Higher interest rates have already resulted in a sharp property repricing in 2022. And with valuations still highly stretched and rental prospects weaker given the imminent recession, we think values will fall further next year. However, as …
9th December 2022
Overview – 2023 will be a tough year for the economy as the effects of the previous rises in inflation and previous hikes in interest rates (as well as a future rise from 3.00% now to a peak of 4.50% in early 2023) are felt. Our view that inflation and …
7th December 2022
Although we agree with the markets that the Bank of England will be patient and won’t pivot from raising interest rates to actually cutting interest rates until 2024, we think that fading inflation will force the Bank to cut rates quicker than investors …
30th November 2022
Overview – The surge in interest rates in recent months has quickly been reflected in property yields, and as a result we have brought forward some of our forecasted rise in yields from 2023 into 2022. But with gilts yields set to fall back next year we …
28th November 2022
Overview – The jump in market interest rates following the ill-advised “mini” budget has forced quoted mortgage rates up to over 5%, a level not seen since 2009. That will turn the slowdown in demand already evident in the survey data into a collapse, as …
31st October 2022
Prospects for economic activity have deteriorated further in recent months as headwinds to growth have become stronger. Inflation looks set to remain high for longer, eroding households’ real incomes; monetary policy is being tightened further and …
25th October 2022
Table of Key Forecasts Global Overview – Persistently high inflation and more aggressive monetary policy tightening now seem set to cause a global recession. While we had previously anticipated contractions in several economies, the gloom has spread …
Overview – The drag on the economy from CPI inflation being stuck at 10% for a year and interest rates rising to 5.00% will be enough to trigger a recession that involves real GDP declining by around 2.0% from its peak to its trough. What’s more, …
20th October 2022
Overview – The latest data suggest that a property repricing is already underway in response to higher interest rates and stretched valuations. We expect a cumulative rise in all-property yields of 35bps-40bps across the Scandinavian and Swiss markets …
22nd September 2022
Overview – Tight supply has supported house prices so far, but they now appear to be stalling. Demand will only deteriorate further over the coming quarters as rising mortgage rates, high inflation, and the recession weigh on buyers’ budgets and …
12th August 2022
The near-term economic outlook has deteriorated in recent months and Switzerland, Sweden, and Denmark are set for mild recessions in late 2022 and early 2023. This is partly a function of external weakness; as highly open economies, the recession in the …
21st July 2022
Overview – Economies in Emerging Europe were resilient in the first half of this year, but the outlook has deteriorated markedly as headwinds have strengthened. Inflation is likely to continue rising and we think that GDP will do little more than stagnate …
20th July 2022
Overview – The euro-zone looks on course to fall into a mild recession in the coming quarters. Real incomes are falling, business sentiment has plummeted and growth in the region’s export markets is slowing. Nevertheless, the labour market is likely to …
14th July 2022
Overview – Weaker economic activity and higher interest rates as a consequence of the war in Ukraine will weigh on property performance in Central and Eastern Europe (CEE). Shifts in investor sentiment and a sharp deterioration in valuations are expected …
30th June 2022
Overview – The rapid turnaround in the interest rate environment has led us to revise down our expectations for property performance in Scandinavia and Switzerland. Property valuations deteriorated sharply in Q1 and are expected to come under more …
27th June 2022
Overview – The weaker economic outlook and larger increases in interest rates are expected to weigh on property performance. With valuations under increasing pressure from sharply rising bond yields, we think that property yields will reach their troughs …
23rd June 2022
If we are right in expecting inflationary pressure to stay strong even as the economy gets dangerously close to a recession, then the prices of gilts and UK equities will probably fall further over the next year. Our forecast that the Bank of England will …
26th May 2022
