Global real estate viewpoint

Opportunity in 2024 – A vintage advantage

Key takeaways

01

Benefiting from the cyclical correction

Globally, investors can benefit from an attractive window to entry in the real estate market whilst capitalizing on outperformance we have historically observed post-downturn.

02

A transitory year for real estate values and sales volumes

Dispersion will likely continue to persist with a “flight to quality”. More macro clarity in the year ahead will likely culminate in improved sentiment and price transparency.

03

Structural trends to drive long term values

There is opportunity today to realign assets with key structural trends, such as aging demographics, the rewiring of supply chains and transitioning assets for higher energy efficiency or modernization. Granularity in asset selection and management will be key to generate outperformance.

The real estate market has faced sharp dispersion in outcomes over the past few years and will likely continue to shift in the face of mega forces. The BlackRock Investment Institute has identified aging demographics as a mega force. As a result of improved healthcare and longer life expectancy, the over-65 cohort is projected to increase significantly in the US and Europe by 2040. The so called “silver wave” will mean how we use real estate will shift; demand will likely increase for health and social services, age-restricted and care housing.

The world’s 1.8 billion Millennials are aging and forming families. Globally, this will drive demand for the residential sector. In the U.S. we see residential in desirable suburbs are attractive over the next few years. In Europe, a lack of housing for sale and higher mortgage rates has made renting a lot more attractive. Millennials are entering into peak consumption and earnings phase of their lives. This will likely point to higher goods spending, thus driving demand for industrial through e-commerce, and necessity-based retail.

Comparison of price corrections by region

Source: Oxford Economics Forecasting, Forecasts may not come to pass. 12 Dec 2023.

Quotation start

2024 is a year when investors can capitalize on the vintage advantage. Investments made after periods of crisis or downturns tend to perform well in subsequent years.

Alex Symes
Head of US Real Estate Research & Strategy

Research & Strategy Team

Simon Durkin
Head of EMEA Real Estate Research & Strategy
Alex Symes
Head of US Real Estate Research & Strategy
US Real Estate Research
EMEA Real Estate Research

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