Risk Monitor - Global Forecast 2020
Despite uncertainty reaching new heights in 2020, there are opportunities on the horizon in the form of currency shifts, investment visas and property tax holidays. We asked our global research teams to give us their take on the biggest risks to their prime residential markets.
10 = Most influential, 0 = Least influential
1 minute to read
Silver Linings
Flora Harley Associate, Global Residential Research
Even before the pandemic took its toll we were nearing the end of the economic cycle, Covid-19 hit reset and 2021 could mark a wave of renewed growth.
As our Risk Monitor shows the pandemic and governments’ response to it, combined with economic performance remains at the forefront. The widespread roll-out of an effective vaccine would be the biggest boost for economic recovery. Equity markets and government bond yields both jumped in response to Pfizer’s vaccine results, demonstrating investor sentiment. Brighter prospects are shifting preferences from ‘safe haven assets’ such as bonds and gold towards opportunities that offer the potential of higher returns, including property. We could see the US dollar weaken which will shift the buying power of international investors. However, international travel could remain limited as there will be a staggered rollout of any vaccine globally and Oxford Economics estimates it could be 2023 before international travel returns to 2019 levels.
With the potential for a quicker return to ‘normal’ this could limit unemployment and support housing markets, plus interest rates look set to remain at record lows for the foreseeable future. The US Federal Reserve has indicated it will not raise rates until at least 2022.