Global commercial real estate value declines have moderated during 2024. Between June 2022 and June 2024, global capital values declined by approximately 15%. However, in Q2 2024 global values declined by just 0.7%, with only the office sector (-2.4%) continuing to experience significant value declines.
Geographically, the most significant declines have been observed in Europe (-19%) and the United States (-18%), while Asia-Pacific has seen a modest overall decrease of just 3.4%, which partly reflects low interest rates in Japan, and less of a spike in valuations in 2021/ early 2022. However, as Japanese inflation has returned and interest rates edge up, property values may begin to fall as property yields come under upward pressure.
Source: HSBC