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Stress in the banking sector will weigh on lending against real estate and is likely to delay the recovery. The market has re-priced quickly, albeit at different speeds. As is normally the case, the UK has led the correction, due to its valuation practices and large and liquid market, which looks to be bottoming out.

Fergus Hicks, Real Estate Strategist

Economies fared well in the first quarter of the year and performed better than expected. China benefited from COVID-19 restrictions being lifted and bounced back strongly, to record growth of 4.5% YoY. Initial data showed the eurozone returned to modest expansion, of 0.1% QoQ, having stagnated in 4Q22, while the US slowed to growth of 1.1% QoQ at an annualized pace. Most of the advanced economies are expected to experience some decline in output during the downturn, which started in mid-22. The US economy is on a slightly different cycle and is expected to slip into recession in the second half of the year. By this time, Europe and Japan are forecast to be in recovery mode.