RICS Monitor: Global Economic Slowdown Intensifies, Despite Pockets of Hope

Tarrant Parsons, Senior Economist, RICS. Image courtesy of RICS

Globally, real estate sentiment continued to deteriorate in the last quarter of 2022. The Royal Institution of Chartered Surveyors’ latest research shows that the higher borrowing costs are really weighing on buyer activity, with the investment market bearing the brunt of the impact of tighter monetary policies across many parts of the world.

The overall message stemming from the Q4 Global Commercial Property Monitor is that we’re seeing a period of adjustment or a bit of a shakeout in aggregate across global markets, as Economist Tarrant Parsons puts it in Commercial Property Executive’s latest podcast.

One region where market conditions seem to defy the rest of the world is the Middle East and Africa. In this region, investment and occupier sentiment metrics remained positive for the third consecutive quarter. Europe is at the other end of the spectrum, as recessionary fears remain most acute across this part of the world. However, the recent decline in gas and energy prices is seen as encouraging news for the region’s prospects.

READ ALSO: Will CRE Construction Hold Steady in 2023?

Asia Pacific is still the most divided region, with mixed sentiment across different markets. While respondents across Singapore and India remain optimistic on the CRE outlook, China and Hong Kong are among the weaker markets. Meanwhile, expectations for North America turned more cautious, as the effect of rising interest rates continues to be felt across the commercial property market.

Here’s what else Parsons told CPE Senior Editor Laura Calugar in this podcast episode:

• the overall tone across the latest survey (0:54)
• the standout performers (2:20)
• occupier vs. investor indicators (3:51)
• general demand metrics across each asset type (5:27)
• construction starts (7:43)
• outlook for capital values and rents (9:08)
• highs and lows across the Asia Pacific region (10:59)
• the results of the survey for Europe (12:54)
• investment and occupier sentiment metrics across the Middle East and Africa (15:16)
• expectations for North America (16:33)
• the global economy in the first half of 2023 (18:10)

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