European real estate recovery thrown off course by Trump uncertainty: MSCI
Property sales in Europe total 41 billion euros in Q1, down 11% on the previous year
[LONDON] A nascent recovery in Europe’s real estate market has been derailed by global economic uncertainty in the early months of US President Donald Trump’s second term, leading deal volumes to shrink after a positive run last year, MSCI data showed.
Property sales in Europe totalled 41 billion euros (S$60.3 billion) in the first quarter of this year, down 11 per cent on the previous year and breaking a run of three consecutive quarters of annual increases, the data showed.
Real estate investors had been betting on improved market conditions after a slow recovery from the Covid-19 pandemic, when higher borrowing costs and changing working patterns crushed many property values.
“During the depths of the slowdown, the mantra was often ‘Survive until ‘25’. Now that we have arrived, the question is: Where do we go from here?” MSCI said in its European capital trends report published on Thursday (May 1).
Higher levels of uncertainty as Trump began to shake up the global economic order this year had led many investors to delay big-ticket purchases such as property, MSCI said, although it added that a shift in sentiment away from US assets to other regions like Europe could ultimately provide a boost.
“The geopolitical and economic uncertainty cannot be underestimated, and volatility in the bond market means debt costs remain high,” the report added.
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Property deal volumes in Britain fell 26 per cent to 10.6 billion euros in the quarter, but remained the region’s most active market.
Germany – one of the region’s hardest-hit property markets – staged a comeback, with sales up 59 per cent on the prior year to 9.6 billion euros, albeit from a very low base. REUTERS
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