For good or for bad, recent years have been good to the headline writer. Not long ago, global real estate investors were aiming to ‘survive till 25’. The question now is what they will do in 2026? Unfortunately - at least for this particular author - the outlook does not lend itself to such a catchy aphorism. This is not necessarily a bad thing.

A catchphrase is often memorable more for the distinctive phrasing than for the accuracy of the underlying statement. In hindsight, those investors looking to ‘survive till 25’ will have actually missed the bottom of the market. In aggregate, real estate prices hit a floor in the second half of 2024, and total returns have been in positive territory since, according to the MSCI Global Property Index.

Sentiment is up…

Equally, general sentiment has improved considerably over the last 18 months, with the data in several major markets - such as the US, Japan, and Australia - back above the long term average. Interest rates are largely yesterday’s news. Additional policy rate cuts would be welcome, of course, but sentiment has recovered over this period despite a material rebasing in bond yields, with buyers and sellers coming together and finding ways to transact. The foundational principle in neoclassical economics, that ‘prices clear markets’, is again relevant in the real estate sector.

…as is liquidity and fundraising

This is supporting a recovery in liquidity in global capital markets, which again can be traced back to the second half of 2024. Global investment turnover rose by around 14% in 2024, based on Savills and MSCI data, underpinned by a very strong final quarter. We’re expecting a further 10% increase in 2025 when the final full-year data is available. Equally, fundraising was also up on the year, according to PERE data.

2026 should see the recovery consolidating

All things considered, when reflecting on 2025, the narrative should be one of consolidation and a broadening out of the recovery, rather than it being an inflection point in the cycle. The next 12 months should see a continuation and gradual strengthening in that recovery (notwithstanding the possibility for a few potential black swan events, which we are now highly accustomed to). As such, my contribution to the real estate vernacular for this year is; ‘A steady yet unspectacular and incremental improvement in conditions in 26.” Let’s see if it starts trending…

Further information

Contact Oliver Salmon

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