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A correction in capital values is under way. Investment activity has dried up, as usual during market downturns when prices adjust. Initial data suggest a swift re-pricing. This would allow the market to settle at new levels and give investors confidence to start transacting again.

Fergus Hicks, Real Estate Strategist

News on the economy at the start of 2023 was better than expected. The eurozone allayed fears and grew slightly in 4Q22, while the US economy maintained a good pace of expansion. Warm weather curbed energy use in Europe and natural gas tanks remained close to full. Optimism also flowed on China following the government’s rapid ditching of its zero-COVID-19 policy. In addition, inflation has fallen globally and looks to have peaked, but remains far above the central bank’s 2% target. The outlook is mixed, with ÃÛ¶¹ÊÓƵ Investment Bank’s analysis of hard data putting recession in the US within the next 12 months at a near certainty, though a strong January jobs report showed little signs of it so far. In the eurozone, the recession probability has fallen back to 25%, while China’s re-opening is set to boost Asia Pacific.