Early Signs of Recovery Should Inject Life into International Real Estate

Even with global interest rates being at historical lows, the coronavirus pandemic is doing the real estate industry no favors right now. With stay-at-home laws in effect, it’s difficult for prospective home buyers to go real estate shopping and agents to visit clients or hold open houses, but there are some early signs around the world that a recovery is in sight.

“In China, ground zero of the outbreak, recovery appears to be in motion, with people returning to work and the wheels of their economic infrastructure starting to turn,” a Forbes report noted. “It’s an encouraging sign for the U.K.’s road to recovery over the coming months.

Looking at the housing market in particular, the damage thus far has been painful and extensive, but a research outlook from Savills using recent data from Oxford Economics projects that while a short, sharp contraction will see UK GDP fall 2.5% in the second quarter of 2020, it will rebound 1.8% in the fourth quarter.”

“During this time, Oxford Economics predicts that the 0.1% interest base rate will remain until at the earliest fourth quarter of 2021, rising to 1.5% as we near the end of 2024,” the report added further. “Conditions that will support growth during the recovery.

One of the reasons for optimism in the real estate market is the heavier reliance on technology. With social distancing rules in effect, more businesses are turning to technology in order to work out the logistical challenges—real estate included.

“With a view on that recovery, there is much that estate agents can do to survive this downturn and be ready to thrive when the recovery begins,” the Forbes report said. “And more so than at any point in history, we live in a solutions-driven society, where technology has the potential to lead the way.”

An International Real Estate Opportunity

Xtrackers International Real Estate ETF (HAUZ) seeks investment results that correspond generally to the performance of the iSTOXX Developed and Emerging Markets ex USA PK VN Real Estate Index. iSTOXX Developed and Emerging Markets ex USA PK VN Real Estate Index is a free-float capitalization weighted index that provides exposure to publicly traded real estate securities in countries outside the United States, Pakistan, and Vietnam.

The MSCI All Country World Index (ACWI) ex-USA is a market-capitalization-weighted index designed to provide a broad measure of stock performance throughout the world by tracking the performance of 22 developed and 24 emerging markets.

HAUZ Chart

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