INREV’s ‘Real estate as an inflation hedge in a normalised monetary environment and changing occupier markets’ paper is the second in a real estate and inflation series, building on earlier research into real estate as an inflation hedge in changing economic conditions over different time horizons.
Key highlights include:
- While real estate has historically provided a partial hedge against inflation, inflation uncertainty and the greater importance of unexpected inflation going forward complicate pricing and weaken its hedging attributes.
- A recent shift toward normalised monetary policy is expected to increase return dispersion, with income becoming a larger component of total returns, impacting real estate’s inflation hedging effectiveness.
- On the other hand, ongoing changes to occupier markets mean a much greater role for income and should be positive for real estate’s inflation hedging role.
- Stock selection will play an elevated role in securing an effective inflation hedge.
Download the short expert paper below.
Real estate as an inflation hedge in a normalised monetary environment and changing occupier markets
Last updated on 15 Oct 2024