"You will lose one pound in every eight but there will be no recession"
Or so says the Chief economist of CBRE Global Investors at the annual conference of the European Public Real Estate in Paris, putting it differently by saying that values will drop by 12%.
“There’ll be no real major economic market impact,” she said of the UK’s vote in June this year to leave the European Union. “The UK will not fall off a cliff. Brexit just accelerates the downfall we were already expecting, bringing it forward from 2018. The UK was already late cycle before (the vote for) Brexit.”
Leaving aside whether an "acceleration" is a "real major economic market impact" (!), the second part of her headline is reassuring, I suppose, balancing such a capital loss against the technical definition of recession, but if I faced losing ten million pounds for every eighty I had invested, I am not sure what that would do to my yields. I might be tempted to keep cash in hand, so increasing the risk of no or even negative growth with the cash not being spent, nor the ancillary services such as lawyers, agents and valuers fees going in to the market. Falling values can lead to vicious circles....
The UK will “flirt” with a downturn next year but avoid a full recession, according to CBRE Global Investors’ chief economist Sabina Kalyan.Speaking at the annual conference of the European Public Real Estate Association (EPRA) in Paris today, Kalyan said the UK will “take a knock”, but the impact will not be significant. Kalyan said CBRE Global Investors, one of the world’s largest real estate investment managers, is forecasting a 12% average fall in values for all property.“There’ll be no real major economic market impact,” she said of the UK’s vote in June this year to leave the European Union.”
