Property investment sales decline 33.4% QoQ in Q3

Higher interest rates and global political uncertainties affected investment sales.

Total property investment sales value was down for the second consecutive quarter, decreasing by 33.4% to nearly $5b in the third quarter, bringing the year-to-date figure to $21.7b.

In a report, Savills said that the third quarter investments were 32.5% lower than the same period last year, and is the lowest level since the first quarter of 2021 which reached $3.89b.

“High interest rates and increased global political uncertainties are changing the profile of investors away from large private equity funds and towards family offices and companies,” said Alan Cheong, head of Savills Research.

READ MORE: Commercial investment sales down 64.6% QoQ to $718.4m in Q3

For the fourth quarter, Savills expects to see investment sales between $3b to $4b as two small sites under the Government Land Sales Programme to be awarded during the period.

This will bring the full-year total to between $24b to $25b, slightly lower than its earlier forecast of between $26b to $29b.

READ MORE: Residential investment sales up for the 2nd consecutive quarter in Q3

“How the market will develop in 2023 depends heavily on whether Central Banks pivot on their current stance of raising or keeping interest rates high. If rates do inflect, we may see a resumption of acquisitive activity by large private equity investors for big ticket item sales,” Savills said.