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April 7, 2016

Global real estate transaction volumes fell in the first quarter of this year in line with weaker market sentiment, however pockets of growth were registered in some regions with expectations for 2016 activity to stay broadly in line with 2015.

Based on JLL’s data on global capital flows, real estate investment volumes in the first quarter of 2016 dropped 14 percent year-on-year to US$133 billion. This compares with US$154 billion registered in the first three months of last year, which was the strongest start to a year in this current six year cycle.

“The heightened level of volatility and risk aversion that we experienced in the first four to five weeks of 2016 have combined with what is always the quietest quarter of the year to make the results for Q1 2016 look quite weak,” says JLL’s Global Capital Markets Research Director, David Green-Morgan. “Nonetheless, recovery has been particularly quick, equity markets are back to early January levels and credit spreads have narrowed again. Capital remains unspent and more is likely to be deployed as we move through the year, leading us to believe that 2016 activity will be broadly in line with 2015 at around US$700 billion.”

Regional highlights

Americas: Canadian market showed resilience

Volumes in the Americas are 16 percent lower than a year ago at US$61 billion. The United States mirrored the wider regional decline with a 16 percent fall but the Canadian market bucked the trend slightly with a more moderate one percent decline.
The Latin American markets suffered most with falls of 47 percent in Brazil and 88 percent in Mexico.

EMEA: UK falls but gains in Nordics

European volumes are 15 percent lower in U.S. Dollar terms at US$48 billion with France and the UK recording the biggest falls of the major markets with 24 percent and 34 percent declines respectively.  Germany performed slightly better with a seven percent drop while, elsewhere, there were gains in the Nordics, Benelux, and CEE.

Asia Pacific: Australia, Hong Kong, South Korea rise

Asia Pacific volumes were five percent lower at US$24 billion with activity reasonably divergent across the region. Australia and Hong Kong came in higher than a year ago while South Korean activity also bounced back from the first quarter of 2015. Both China and Japan registered a decline and most emerging markets were all lower than Q1 2015.

David Green-Morgan
Global Research Director, JLL

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