With investment activity and yield movements subdued, the latest data were yet another reminder that rental values will be the primary determinant of capital value growth this year. What’s more, this also suggests that the likelihood of a quick reversal of the momentum in the sector is minimal. The combination of healthy all-property rental value growth and some equivalent yield compression meant capital values increased by 0.3%m/m. And although modest compared to December’s 0.7%m/m jump, it was the fourth consecutive monthly increase in capital values. However, following the third quarter wobble, capital values are still more than 2% lower than in January 2016.
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