Q4 property valuation scores rose from their Q3 troughs, as equity earnings yields fell and property yields all increased. Even so, that left all major sectors still looking overvalued, suggesting yields have further to rise before property looks fairly valued against alternative assets. We expect a similar-sized rise in property yields in the next couple of quarters to move property valuations closer to fair value. However, we expect industrial property to continue to look overvalued on this measure for the foreseeable future. At a metro level, NYC and San Jose offices, as well as Chicago apartments all now look fairly valued, but, in our view, these markets remain amongst those with poorest rent growth prospects.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services