The ECB's Quantitative Easing Program will Boost Property Markets in the Eurozone.

The ECB surprised markets this week by announcing the size of its quantitative easing (QE) program, which could assist to stabilize recent bond yield and currency losses and pave the path for greater inflation expectations and improved GDP growth. shop for sale in qatar

Of doubt, maintaining market confidence will be critical in the near term, but the QE program must inspire governments to pursue deeper structural reforms in the long run. Dedicated reformers, such as Spain, will, in our judgment, be rewarded the greatest with greater activity and inbound investment.

"If the QE program is effective, the impact on property markets in general might be enormous," said David Hutchings, Head of EMEA Investment Strategy at Cushman & Wakefield, "since even more demand would now be directed into the market." As a result, yields are projected to decrease further than projected, and volumes will be pushed back even farther toward record levels."

According to Cushman & Wakefield, absent QE, the market would expect a 5-10% boost in European investment volumes this year, as well as a 20-30 basis point drop in prime yields. With a successful QE package producing lower borrowing rates for longer periods of time, stronger growth, and some reform, that projection has been raised to a 40-70 basis point yield drop and a 20%+ increase in property trading.

Cushman & Wakefield also points out that this presupposes investors can discover the stock they want to buy, which is based on bank sales and deleveraging, profit taking, and stock recycling. "We should expect growing interest in a range of foreign markets as Europeans export cash in pursuit of possibilities, as well as a return to development, aided by recent decreases in material prices lowering construct costs," Hutchings says. Furthermore, we anticipate more business activity, such as asset sales by corporations, joint ventures, and takeovers."

 

Hong Kong is the most expensive office market in the world, costing twice as much as the rest.

Office space in Hong Kong is more than twice as expensive as top commercial property in any other worldwide metropolis, according to property consultant Knight Frank.

Knight Frank analyzed capital values for premier offices in 32 locations as part of its 2015 forecast for global commercial property, finding that top Hong Kong office space is valued at 70,000 US$ per sq. m. This is much more than Singapore's second-placed rate of 28,340 US$ per sq. m, and more than three times more than the City of London's rate.

 

The following are some of the most important worldwide office market estimates for 2015:

Ultra-high-net-worth individuals and state-owned corporations are leading a new wave of Chinese investment.

Japanese pension funds will diversify into international real estate.

Rents will rise as tenant demand for offices grows and availability decreases.

Investors will continue to flock to specialist property, and it will become more popular.

 

Despite recent high capital value growth and an uneven global recovery, Knight Frank predicts that cross-border investment will expand in 2015, as investors seek greater returns and diversification outside of their home markets.

Given the enormous weight of money targeting real estate, Knight Frank predicts worldwide investment volumes will climb by at least 10% to above US$700 billion in 2015. The final figures for 2014 is projected to reveal that worldwide commercial property investment volumes topped US$600 billion, a 15% increase over 2013.

"The availability of land and land values are the basic problems that are driving rents and capital prices in Hong Kong and Singapore, in particular," said Darren Yates, Head of Global Capital Markets Research at Knight Frank.

These areas have a limited supply of land, high population densities, and a large number of successful multinational enterprises that can afford to pay higher rates."