UK economist upbeat as others in europe predict more doom and gloom for property industry
A leading UK economist is predicting a recovery in the real estate industry before the wider economy improves as everyone else predicts more doom and gloom.
Speaking at a conference in Paris, Roger Bootle, often referred to as ‘Dr Death for his gloomy economic forecasts, said that low interest rates over the next two years would have a positive impact on the commercial property sector in particular.
He told delegates at the Urban Land Institute’s annual European gathering that he is upbeat. ‘I see an enormous amount of money waiting on the sidelines ready to be invested,’ he said.
‘The next two years will be pretty grim for the economy and the implications for the property industry will be falling rents and tenant defaults. However, the sector may see a rebound in activity and prices well before overall levels of economic activity have improved,’ he added.
But despite Bootle’s optimism, other financial experts were less positive over the expectation of cash-rich investors waiting to pounce on bargain property prices.
‘The situation facing the real estate market is one of severely restricted capital flows on both the debt and the equity side,’ said Fredrik Elwing, managing director of Credit Suisse.
Others pointed out there is still much unravelling to be done by banks before they move forward and start lending again.