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In most countries across the globe, real estate continues to provide attractive investment opportunities from both a macro-economic driven top-down perspective and property fundamentals based bottom-up perspective. From a top-down perspective, we have evidence that real estate tends to produce stronger returns when inflation-adjusted, real interest rates are equal to, or below, their long-term average and economic growth is within range of its long-term average. Lower real interest rates typically provide support for future economic growth, which in turn supports real estate fundamentals and liquidity. Today, real interest rates globally are below their long-term averages and as a result, real estate should deliver returns near their 20-year historical averages, although conditions will vary by market. Economic growth should also favor stronger returns as GDP growth is forecast to accelerate during the next five years.
Source : Deutsche Asset & Wealth Management
