GLOBAL MARKET OVERVIEW 2022

Rising interest rates, volatile asset valuations and fears of housing market corrections have taken their toll on global real estate activity through the course of 2022.

After reaching record highs in 2021, global real estate deal value has tailed off this year with the deal down 13% year-on-year, according to White & Case's M&A Explorer.

Deal value for 2022 is down despite a solid first six months of 2022 and without the uplift of a cluster of jumbo real estate deals closed in the first half.

Q2 2022 and the lowest quarterly total posted since the first COVID-19 lockdown in 2022. Indeed, real estate activity dropped off materially in Q3 as the impact of rising interest rates in the US and Europe knocked sentiment.

Against this challenging backdrop for deals, half of the respondents (52%) said they were either uncertain or pessimistic about real estate deal-making opportunities in the short term, and 48% were cautiously optimistic or optimistic.

The global real estate market grew from $3,386.11 billion in 2021 to $3,690.55 billion in 2022 at a compound annual growth rate (CAGR) of 9.0%. The Russia-Ukraine war disrupted the chances of global economic recovery from the COVID-19 pandemic, at least in the short term. The war between these two countries has led to economic sanctions on multiple countries, a surge in commodity prices, and supply chain disruptions, affecting many markets across the globe. The real estate market is expected to grow to $4,828.88 billion in 2026 at a CAGR of 7.0%.

The real estate market's growth will be aided by stable economic growth forecasted in many developed and developing countries. The International Monetary Fund (IMF) predicts that the global real GDP growth will be 3.7% over 2019 and 2020 and 3.6% from 2021 to 2023. Recovering commodity prices, after a significant decline in the historic period is further expected to aid the market growth. Developed economies are also expected to register stable growth during the forecast period. Additionally, emerging markets are expected to continue to grow slightly faster than developed markets in the forecast period. For instance, India's GDP is expected to grow at 7.3%, whereas China is forecasted to register a GDP growth of 6.2% in 2019.