PROPERTY OUTLOOK FOR 2022 with John Loos
A s we near the end of 2021, many begin to ask what 2022 holds in store for us, econo- my-wise as well as property market-wise. After a deep recession in 2020, economic growth has partly recovered off a very low base, as lockdowns have eased and economic activity has headed towards normal. In 2022 we expect real GDP (Gross Domestic Product) level to get back to pre-lockdown 2019 levels. This is not expected to be enough to stop the All Property Vacancy Rate from rising further just yet. However, it is expected to bring about a situation where All Property rentals return to very low nominal growth, and capital values on property return to very low nominal growth too. These growth rates are expected to be still too slow to keep up with general inflation, however, thus translating into further property value correction in real inflation-adjusted terms in 2022. Considering property classes, we expected that of the major 3 commercial property classes, the office property market will still remain in all out value decline, pressured by a sharply rising vacancy rate in lagged response to higher working from home as well as the “hotelling” of desk space to use space more efficiently. Retail Property by comparison is expected to see its nominal value decline end in 2022, while Industrial Property is expected to be the relative outperformer, with some positive capital growth as the country gears up for greater logistics capabilities related to online retail. On the Residential side, we believe that the home buying surge will taper off as interest rates begin to rise in 2022, while the very weak rental market may show some mild recovery as a bigger number of aspirant buyers put home buying on hold to wait out the interest rate hiking cycle. LOOK OUT FOR JOHN’S NEWPAGE ON OURWEBSITE IN 2022!
Made with FlippingBook - Online Brochure Maker