Quick Bites | US property valuations under pressure

A significant casualty (and cause) of banking stress is likely going to be all categories of property investment. The 40-year chart below highlights movement in US real estate investment trusts (REITs), commercial real estate, and housing markets – all sectors where valuations reached record highs in the wake of pandemic emergency stimulus measures. Housing valuations remain near their peak, and are still expensive, whereas the listed REITs have price adjusted more rapidly, and are now fairly close to their long term average. Commercial real estate is somewhere in between. Similar trends would be evident in Australian property markets.

Source: Callum Thomas



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