The effect of high inflation and rising interest rates on real estate values and valuation approach

Abstract

Following on from the COVID-19 pandemic and the challenges faced during that period, valuers now have new issues to consider, as rapidly rising inflation and volatile interest rates not witnessed for a generation have had an effect on markets during 2022 — especially in the final quarter and going into 2023, as we see far reduced investment volumes and ongoing price discovery across European markets. This paper looks at how rising inflation and interest rates affect values and also how valuers need to develop new skills and understanding in valuing real estate assets in increasingly interconnected global financial markets.