RCA Insights

Global Price Growth Ebbs in Second Quarter

By on August 16th, 2018

The pace of annual growth in global commercial real estate prices eased for the third consecutive quarter in Q2’18, the new edition of the RCA CPPI Global Cities report shows. The Global Cities Composite of the RCA CPPI rose 6.1% from a year ago and increased 0.6% from the prior quarter.

The rate of year-over-year price growth has slowed across each global zone as several key markets have begun to plateau. After an extended cycle of global commercial property price increases, investors are more alert to higher pricing in many core cities. This slowing does not indicate an oncoming crisis but instead shows that investors are exercising more caution and selectivity.

Global_Cities_1808_V2

The momentum of both price and volume growth has begun to stabilize across markets in the Global Cities Composite. The chart above plots the year-over-year change in deal volume versus the year-over-year change in prices, and over the past year most markets have begun to move close to the origin of the chart axes.

Annual price increases slowed in Asia Pacific, but the pace of growth in this region is still stronger than in North America or Europe. Sydney holds the number one spot for price growth among the global cities tracked by RCA, and price gains in Seoul have accelerated.

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.