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Rise in interest rates lead real estate concern amidst political turmoil

7 June 2018

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  • Rising interest rates voted as leading threat to real estate investment, despite European political turmoil
  • 92% of real estate professionals view Italy as having the highest level of political risk in Europe

Despite political turmoil in Italy and Iberia, and Brexit, political uncertainty didn’t appear in the top three threats to the real estate investment market, cited by real estate experts who participated in a poll at a seminar hosted by Intertrust in May 2018.

41% of respondents instead voted rising interest rates as the biggest threat to the asset class, followed by stretched valuations (31%) and competition for assets (25%).

Jon Barratt, Head of Real Estate at Intertrust, said, “While political risk certainly persists and often dominates news headlines, our poll demonstrates that it’s by no means
the top concern facing investors. Instead, economic and market factors hold much greater sway including high valuations, increased competition and the
spectre of rising interest rates.”

The survey found that 92% of respondents placed Italy as posing the highest level of risk, followed by the UK and Iberia.

Jon Barratt, said, “Given recent events, it’s unsurprising that Italy topped the list for political risk. However, it’s notable that Brexit-based uncertainty still persists.”

To read our latest real estate research report, click here.