RCA Insights

Global Price Growth Wanes in Q1, Report Shows

By on May 17th, 2018

Growth in global commercial real estate prices slowed at the start of 2018, the new edition of the RCA CPPI Global Cities report shows. The Global Cities Composite of the RCA CPPI increased 1.6% in Q1’18 from a quarter earlier and rose 8.4% from a year ago.

A number of key markets posted flat-to-modest quarterly declines in prices. Only one market of the 18 which contribute to the Global Cities Composite is displaying an annual drop in prices.

Though a quarter does not represent a trend, the quarterly slowing in some markets may indicate that investors are taking a moment to regroup after several years of sustained price growth in real estate markets worldwide. In most cases, the markets posting price declines for the quarter are those which have grown the most over the past five years.

London, Los Angeles, San Francisco and Melbourne all registered price drops for Q1’18. Each of these markets has experienced above-average growth over the past five years. Within New York, Manhattan is posting a quarterly decline and the central area of Sydney is posting a quarterly drop as well. In these two cases, growth for the overall market has remained positive despite the city center declines.

1805 Global Cities main-01

The RCA CPPI Global Cities report is published quarterly. To learn more about the RCA CPPI and to sign up for reports visit rcanalytics.com. If you are an RCA client you can also access this report and conduct your own CPPI analysis on the RCA website.