UBS Real Estate Outlook – Inflation yet to peak

The Ukraine-Russia war will not have significant direct impacts on the European property market outside of Central and Eastern Europe, anticipates UBS in its real estate outlook. However, the indirect impacts of higher energy costs and weakened business confidence may slow the economic recovery. Historic evidence suggests property pricing usually remains stable during crisis events unless accompanied by a major economic downturn.

Europe was already grappling with inflation at the highest level in decades before Ukraine was invaded by Russia, and with energy prices set to continue to rise during the course of 2022, this will place further pressure on consumer confidence and spending power. Business investment may also be eased back in light of the heightened uncertainty and geopolitical risks, and energy-intensive industries will suffer disproportionately. New conflict zones will disrupt supply chains further, and the cost of shipping will rise in line with higher oil co