While residential markets from Sydney to Seattle saw surprising price resilience in 2023, a starkly different story unfolded in commercial sectors and investment flows, revealing a property industry at a complex crossroads.
Key Takeaways
- In 2023, the US median existing-home sales price reached $389,800, up 5.7% from 2022
- Globally, residential property prices rose by 5.6% in Q2 2023 year-over-year
- UK house prices increased by 1.7% in 2023, with average price at £285,000
- US office vacancy rate reached 19.6% in Q4 2023, highest since 2010
- Global shopping center vacancy averaged 8.2% in 2023
- UK prime office rents in London fell 10% in 2023 to £130/sq ft
- Global real estate investment volume fell 28% to $810bn in 2023
- US REIT total returns averaged 8.2% in 2023
- APAC real estate funds raised $25bn in 2023, down 40%
- Global residential rental yields averaged 5.1% in 2023
- US multifamily asking rents up 2.8% YoY to $1,700 in Q4 2023
- UK private rental sector grew to 5 million households in 2023
- Global green building certifications reached 25,000 projects in 2023, covering 4.5bn sq ft
- US buildings accounted for 39% of carbon emissions in 2023
- Europe net-zero buildings investment hit €50bn in 2023
The property industry showed stable residential growth but challenging commercial and investment conditions in 2023.
Commercial Market
- US office vacancy rate reached 19.6% in Q4 2023, highest since 2010
- Global shopping center vacancy averaged 8.2% in 2023
- UK prime office rents in London fell 10% in 2023 to £130/sq ft
- US industrial vacancy rate dropped to 5.3% in Q4 2023
- China's commercial property investment declined 9.8% in 2023
- Australia retail sales space vacancy was 2.8% in 2023
- Europe hotel occupancy rate averaged 68% in 2023
- US multifamily vacancy rate was 6.8% in Q4 2023
- Singapore office rents down 5.1% YoY in 2023
- India commercial leasing volume reached 62 million sq ft in 2023, up 26%
- Germany retail vacancy rate at 4.5% in 2023
- US flex space vacancy 8.2% in Q4 2023
- Brazil office vacancy up to 15.2% in Sao Paulo 2023
- Japan logistics rents rose 8% in 2023
- Canada retail vacancy 4.1% nationally in 2023
- France commercial investment volume down 45% to €18.5bn in 2023
- South Korea office vacancy 12.3% in Seoul 2023
- UAE hotel RevPAR up 15% to AED 450 in 2023
- Netherlands industrial take-up 3.2 million sqm in 2023
Commercial Market Interpretation
The global property market has delivered a report card that reads: "While warehouses are packed, hotels are busy, and some retail is surprisingly resilient, the office sector's performance is so universally dismal that it might need to borrow a couch from the booming industrial sector until it figures its life out."
Investment Trends
- Global real estate investment volume fell 28% to $810bn in 2023
- US REIT total returns averaged 8.2% in 2023
- APAC real estate funds raised $25bn in 2023, down 40%
- European property investment yields rose to 5.8% prime office in 2023
- Private equity real estate dry powder at $300bn globally end-2023
- US single-family rental investment hit $50bn in 2023
- India REIT market cap grew to INR 1.2 lakh crore in 2023
- Mortgage REITs saw 12% dividend yield average in 2023
- Global data center investment reached $45bn in 2023, up 20%
- UK property fund outflows totaled £5bn in 2023
- Australia super funds allocated 12% to property in 2023
- Brazil real estate investment trusts raised BRL 10bn in 2023
- US crowdfunding real estate platforms funded $4bn in 2023
- China overseas property investment down 25% to $20bn in 2023
- Canada pension funds property allocation at 8.5% in 2023
- Spain property investment volume €12bn in 2023, down 30%
- Singapore REITs total assets SGD 100bn in 2023
- Mexico real estate FDI $2.5bn in 2023
Investment Trends Interpretation
The market is throwing a global tantrum with falling investment and soaring yields, but beneath the drama, a smarter, sharper beast is emerging, quietly amassing capital and ruthlessly targeting the niches—from data centers to single-family homes—where the future actually lives.
Rental and Leasing
- Global residential rental yields averaged 5.1% in 2023
- US multifamily asking rents up 2.8% YoY to $1,700 in Q4 2023
- UK private rental sector grew to 5 million households in 2023
- Australia median rent AUD 550/week in capital cities 2023, up 9%
- China's long-term rental market valued at RMB 300bn in 2023
- US office asking rents $33/sq ft nationally in 2023
- India residential rental growth 8.5% in top 7 cities 2023
- Germany rental vacancy rate 1.8% in major cities 2023
- Canada average rent CAD 2,100/month in 2023, up 8%
- France rental index up 3.2% in 2023
- Brazil residential rents rose 7.1% in 2023
- Japan office leasing demand down 5% in Tokyo 2023
- South Africa rental yields 9.2% average in 2023
- Spain tourist rental supply up 15% to 300,000 units 2023
- Singapore HDB rents up 6.8% YoY in 2023
- US retail rents stable at $23/sq ft nationally 2023
- Italy rental contracts up 4% to 2.1 million in 2023
- Mexico office rents down 2% in CDMX 2023
- Netherlands retail rents fell 3.5% in prime locations 2023
Rental and Leasing Interpretation
From the relentless climb of rents in Canada and Australia to the stubborn emptiness of offices in Japan and Mexico, the global property market in 2023 screamed a single, unifying truth: everyone needs somewhere to live, but nobody is quite sure where to work.
Residential Market
- In 2023, the US median existing-home sales price reached $389,800, up 5.7% from 2022
- Globally, residential property prices rose by 5.6% in Q2 2023 year-over-year
- UK house prices increased by 1.7% in 2023, with average price at £285,000
- In Australia, median dwelling prices hit AUD 776,000 in Sydney by end-2023, up 6.1%
- China's residential property sales volume fell 8.5% in 2023 to 1.02 trillion sqm
- US new home sales averaged 668,000 units annually in 2023
- Inventory of existing homes for sale was 1.11 million units in Dec 2023, up 3.5% MoM
- Homeownership rate in US stood at 65.7% in Q3 2023
- In Canada, average home price was CAD 685,000 in Nov 2023, down 1.5% YoY
- India's residential sales reached 303,000 units in 2023, up 22% YoY
- Germany residential property prices grew 1.2% in 2023
- US housing starts were 1.41 million units in 2023, down 1.7% YoY
- Average US home size was 2,299 sq ft for new single-family homes in 2023
- France house prices rose 4.8% YoY in Q3 2023
- Brazil residential sales volume increased 12.4% in 2023 to 1.2 million units
- Japan home prices up 2.1% in 2023, average ¥35 million
- South Africa property prices grew 0.5% in 2023
- Spain residential transactions up 11% to 582,316 in 2023
- Mexico home sales rose 4.2% in 2023 to 1.1 million units
- Italy house prices increased 2.3% YoY in 2023
Residential Market Interpretation
From Sydney to Spain, the global property market in 2023 painted a picture of stubborn resilience, where house prices mostly defied gravity with modest gains, though a few key markets like China reminded us that what goes up must, occasionally, come down for a breather.
Sustainability and Innovation
- Global green building certifications reached 25,000 projects in 2023, covering 4.5bn sq ft
- US buildings accounted for 39% of carbon emissions in 2023
- Europe net-zero buildings investment hit €50bn in 2023
- PropTech funding globally $18bn in 2023, down 38% YoY
- China green building floor area exceeded 30bn sqm by 2023
- US smart building market valued at $100bn in 2023
- UK EPC A-rated homes only 1% of stock in 2023
- Global BIM adoption rate 70% in new projects 2023
- Australia net-zero emissions target driving 20% green retrofits in 2023
- India PropTech startups raised $1.2bn in 2023
- US energy-efficient mortgages issued $20bn in 2023
- Singapore green mark certified buildings 35% of stock in 2023
- Global modular construction market $120bn in 2023, up 6%
- Brazil LEED certified projects doubled to 150 in 2023
- Japan zero-energy houses 10% of new builds in 2023
- Canada ESG real estate investment $15bn in 2023
- France RE2020 standard applied to 100% new buildings from 2023
- UAE 50% green buildings target met early in 2023
- Global IoT devices in buildings 1.5bn units in 2023
Sustainability and Innovation Interpretation
The property industry’s race toward sustainability is both heartening and sobering, for while green certifications and investments are soaring, carbon footprints remain stubbornly high, and the tech enabling this transformation is navigating choppy financial waters.
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