About the Real Estate Industry
The global real estate industry continues to be affected by the global economic downturn, which began in 2008 and has doggedly remained into 2012 with bleak short term forecasts. High unemployment in major economies, combined with deficit and debt crises have increased economic concerns and prolonged the economic malaise.
The real estate industry in the United States is characterised by high vacancy rates with asking rents remaining low. Improvement in the US real estate is not likely until employment rates pick up or until business confidence improves. In terms of residential housing, the housing market has a problem of excess vacant units due to lack of jobs. The economy in Canada has performed well, and recovered nearly all jobs lost during 2008/9. The real estate sector in Canada is balanced in most markets and asset classes, with increased investment and construction activity.
In Europe, the prolonged economic crises continues, moving from banking failures to sovereign debt crises. There is a real prospect of Greek default on its debt, requiring it to leave the Euro, putting pressure on Italy and Spain's already growing borrowing rates. Property investment markets in Europe reflect the economic uncertainty, with investors seeking certainty in prime real estate. Popular targets include London and Paris. Office rents are either static or falling. Within the Industrial real estate sector in Europe, food retailers and internet business suppliers continue to dominate the market. Within retail, prime locations in London have performed well, although the rest of the UK has suffered, with the demise of a number of well known retailers.
Asia Pacific investment markets, whilst not in the maelstrom of financial woes, have equally not been immune to the volatility. Hong Kong, Singapore, Japan and Australia all experienced a slowdown in transactions towards the end of 2011. China's commercial and land demand continued to increase, although slower than it had been previously.Government intervention has affected real estate markets, with Singapre, Hong Kong and China introducing tighter property regulation, including restrictions on number of properties one family can own in one city, larger deposits and the introduction of annual property taxes. Office rental rates are in decline in various cities in the Asia Pacific region.
