Real Estate

Hot or Not: What does 2022 Hold in Store for Global Real Estate

Omicron, high inflation, economic recovery – there are plenty of mixed signals in store for the global real estate market in 2022. So, what will this new year bring? 

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2021 was a year in which the global economy started to recover its nerve. After the turmoil of 2020, global real estate investments reached record levels in 2021. During the first three quarters of the year, $757bn changed hands, which put investments at their highest levels for nine years. 

Much of this was down to returning economic confidence and the market making up for the lost time. However, with uncertainty returning in the shape of Omicron, 2022 looks a little more difficult to predict. 

There are plenty of things to worry about. Omicron is spreading around the world bringing with it the return of lockdown restrictions in many places. Even in those which it hasn’t, it has helped to sow uncertainty. We do not yet know for certain how bad the omicron wave will be or if there are more variants out there waiting to put a spanner in the works. Anyone who says they can confidently predict what course the pandemic will take over the next 12 months is either fooling themselves or attempting to fool everyone else. 

In addition to omicron, there is further uncertainty about the direction of the economy. In many sectors, confidence is returning, but high inflation in many developed countries could put a dampener on the market. The last twelve months have been unprecedented in terms of economic impact and government support. We do not yet know for certain what long-term impacts this will have if any of the world’s major economies. 

The post-Covid household

One development we will have to live with is the impact of new trends brought about by the pandemic. COVID-19 undoubtedly created activity in some areas of the market. It changed what people wanted from a home with markets everywhere reporting increased demand for flats or houses with more space and a garden. Many people chose to move away from injecting activity into the somewhat stable rural property market. 

However, in the latter half of the year, we have seen a reversal of that trend with prices surging in cities such as London and Paris. The lifting of restrictions has reminded people what they enjoyed about living in cities in the first place and are tempting them back. If 2020 and 2021 were years of the great exodus from the cities, 2022 could see the great return. 

Holiday home investments 

Another area of uncertainty will be the future of property investments. 2020 saw international travel dry up to almost nothing. 2021 was better but with COVID restrictions still in place for much of the first half of the year, the holiday season was still badly affected. 

All eyes have been on the summer of 2022 and if it would see a surge in holidaymakers as people made up for the lost time. There are signs of that happening, with investors looking to invest in both established destinations and some up-and-coming hotspots. 

The outlook for 2022, then, is mixed. Prices will likely rise over the year, but gains are likely to be uneven. There are reasons to be cheerful with the prospect of economic growth, but also reasons for being cautious with rising inflation. Making a solid prediction will be easier said than done.  

If you would like to learn more about global real estate investment or have any questions, contact one of our experienced property consultants today, who will be happy to assist you. You can also take a look at some of our current properties here.