There was a huge deterioration in property valuations in Q1, reflecting the sharp rises in alternative asset yields recorded since the start of the year. The size of those yield rises mostly dwarfed the differences in property yield changes across sectors and metros in Q1, meaning that the drop in valuation scores was pretty consistent across the board. Looking ahead to Q2, further increases in alternative asset yields and our expectation of additional small falls in property yields point to another 40-50 bps worsening in valuations next quarter.
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