Mixed signs: Ten years after the collapse of Lehman Brothers, are we in another bubble?
Extremely high investment volumes, low yields, astronomically high average values, uncontrollable debt, and a clear supply-and-demand imbalance created by high levels of new developments. That’s what the real estate market looked like in 2008 before the crash. Ten years later, are we experiencing a déjà vu? And if we are, then how can investors future-proof their real estate portfolios before the next crash?
There is currently an economic bonanza across the European real estate market. Yields are on a downward trend and rental growth is up across all sectors. There is a lack of supply in most markets, with a heightened demand for high-quality space, from both companies and individuals alike.
In many ways it feels like we’re at the peak of the cycle. The prices of core real estate assets in prime locations are at the highest level they’ve ever been — just as they reached historic highs before the 2008 crash.
However, the record valuation seen 10 years a