It’s no longer whispered, it’s out there! Many commentators agree that we are about to enter an unprecedented period of growth, with the increasing likelihood that we won’t see a cyclical downturn for a generation. A combination of tight supply caused by restrictive planning, high construction costs and soaring demand, driven by low interest rates will push up both residential and commercial prices for the foreseeable future. Factor in global instability, you also have money from around the world seeking a home in a stable environment.
Dramatic words, yes, but these are exciting times and with that comes significant opportunities. It’s all the more incredible when you consider the extent of the recent crash. Since then, central banks from all over the world printed money through QE and foreign investment cash followed them looking for safe havens. This flood of money raised prices and reduced yields, primarily in city centres but gradually filtering out regionally. As a consequence, office and retail rents are rising as companies seek opportunities.
It is a tough cycle to read because of its unprecedented nature. Low interest rates and low inflation, coupled with tentative economic growth indicate a sustainable future, but threats remain such as the difficult planning process, high build costs and the implications of Greek and UK exit from the EU. So, enjoy the moment – we’re in a period of upward growth with high rents and low yields creating a highly priced market, albeit in relative terms.