RCA Insights

Global CRE Price Growth Slows Further: RCA Report

By on November 15th, 2018

Annual growth in global commercial real estate prices eased in the third quarter of 2018, continuing a trend evident since the start of the year, 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 1.1% from the prior quarter. At the end of 2017 annual price growth was faster than 10%.

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Slowing growth in the Americas has placed the biggest drag on the Global Cities Composite, with the pace of price growth here decelerating since mid-2017. Europe began a pace of slowing soon after. Asia Pacific markets, which have displayed higher growth than in the Americas and Europe, began to show deceleration at midyear 2018.

Melbourne and Seoul registered the fastest price growth among the 18 markets which are components of the Global Cities Composite. In Melbourne, double-digit annual price gains were spurred by office sector deals. Seoul prices rose at the second-fastest clip among the global cities. The pace of price increases in Hong Kong, which has experienced the strongest price appreciation since the last downturn, ebbed in the third quarter.

Commercial property prices in the London metro area increased at the third-slowest clip among the global cities. Boston was the only market which showed a decline in annual price growth in the third quarter. Of the U.S. cities tracked, San Francisco showed the biggest annual price gains, followed by the New York metro area.

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.