The net effect is a global real estate downturn which is nowhere near as deep and disastrous as history would suggest it might have been. Supply has risen, vacancy rates have climbed and rents and some prices have been corrected downward. In general terms though, on an international scale, revisions to market indicators have been less dramatic than the downshift in economic growth and equity market performance.
The physical characteristics of property means that there will always be a disparity between construction and demand and this results in supply overhangs and pockets of building distress in selected markets. At present though, these are comparatively modest in historic terms and most real estate markets have proved far more resilient than might have been expected prior to 2000 when conditions were less challenging.
There will forever be pronounced differences at a local market level and exceptions which buck the trend. Overall though, economic conditions are progressively improving and corporate prosperity rising. This will foster a more positive environment for real estate demand over the next 12 months. Sector variations persist. The jobless nature of recovery in the service sector, off-shoring and latent supply held within sublease inventories do place a question mark over bounce-back in the office market.
property valuers Better symbiosis between the capital markets, economies and real estate sectors has emerged and this bodes well for more sustainable growth in the future.
The concept of a jobless recovery was unknown in earlier recessions because the economy began creating jobs again within a month after the end of each recession. Productivity and global outsourcing are the primary drivers behind the jobless recovery of the past two years. Companies are using technology to produce more goods and services using fewer workers. Companies also are moving existing jobs overseas to take advantage of lower wages or creating new jobs overseas to open up new business opportunities in emerging markets. A study by consultants Economy.com concludes that one-quarter of the 2.7 million jobs lost in the US during the past three years moved to India, China and other low-wage markets.