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2023 has been a challenging year for real estate due to persistent inflation and a 15-year high in interest rates, both of which negatively impacted economic growth. This led to plummeting volumes of commercial real estate (CRE) investment, which hit a decade low, as investors grappled with declining asset values and increased borrowing costs. Yet while 2024 will likely start the same way, there is more to be optimistic about. The inflation rate significantly fell towards the end of 2023 and is expected to continue its downward trajectory. Although we anticipate base rates to stay high for an extended period, there is the real prospect of rate reductions in the latter half of 2024, which would be advantageous for both occupiers and investors and should stimulate activity.  

The forthcoming general election is likely to be a major focal point in 2024. The Conservative party are currently trailing in the polls and is determined to increase its ratings. This could potentially involve introducing some beneficial tax changes in the Spring Budget. In addition to politics, sustainability will be a key concern in 2024. We expect a continued shift towards flight to quality, with the most energy efficient assets being highly sought after. The understanding of AI will accelerate over 2024 and its adoption will grow, which will help enhance efficiencies in the real estate sector.  

Continue reading to learn more about the prospects for real estate in 2024.