We continue to see strength in the real estate market and capital inflows show no signs of abatement. This is despite negative international headlines which have led to drops in major equities indexes worldwide.
In the Savills/WealthBriefing survey, 91% of bankers and wealth managers indicated that their clients intend to increase or maintain their direct real estate holdings. 87% said their clients plan to increase or maintain indirect holdings. Global capital will continue to flood into real estate.
With so much cash still on the sidelines (hundreds of billions of dollars in the US), there is far more capital than real estate available. Cap rates could continue to compress as the macro economy remains strong in the near term.
Multifamily will remain hot as millennials continue to delay large life decisions. Exceptions may arise in urban submarkets where overconfident developers fall prey to creating oversupply. Agree or disagree? Feedback is always welcome in the comments or via email at firstname.lastname@example.org.
Image Source: Jerry Meaden, Flickr