Volativity in financial markets returned with a vengeance in 2016, driven by woes related to a decelerating China as well as the enduring slump in oil proces. The pace of interest rate normalization that was kicked off in December by the Fed will likely now be more drawn out. It remains to be seen how this past month's events will impact property fundamentals (aside of Houston) as well as investor demand. Based on anecdotes, there is some talk of a pause in transaction activity, with some investors waiting to see how markets will shakeout and what this means for a current pricing levels. Looking at the year-end fundamentals data, property markets in the U.S. by and large continued to improve in the fourth quarter. Office really hit its stride this year, after lagging Apartments benefit from favorable demographic trends that continue to fill apartments despite the supply spigot fully on. Retail, the laggard of the bunch, nevertheless has seen measured improvements in recent quarters. Things look good going into 2016 for real estate, but added uncertainly today is undeniable. Hold on investors, 2016 looks set to be a bumpy ride!
Source : CBRE Global Investors