Insights

In this article, we look at the history of the global financial crisis (GFC), how it compares to the current environment, and the implications for US housing.

It’s been a volatile year. High inflation, along with actual and expected high interest rates, have roiled markets across equities, fixed income, commodities and real estate. According to the theory, high interest rates stifle economic activity, reducing demand and moderating consumer prices.

The latest trends in housing, retail and venture capital – and what they mean for investors.

It’s been a tough six months; not only for listed real estate, but for most risk assets as well. Even the natural portfolio risk dampener, sovereign bonds, has suffered. 

In global real estate, there has been no sector that has enjoyed more demand tailwinds over the past 10 years than industrial.

Listed real estate has performed well relative to broader equities, again proving itself a defensive asset class during periods of high inflation and rising interest rates.

In August last year, we highlighted that real estate (listed and direct) tends to outperform equities during periods of high inflation.

Just as we seemed to be passing peak inflation (port access has been improving and second hand car prices declining), the recent attack by Russian forces into Ukraine has resulted in another spike in commodity prices.

According to CoreLogic, Australian house prices increased +22.1%[1] in 2021, led by Australia’s largest city of Sydney (+25.3%).