London will be among the first cities where real estate investment recovers, according to a new analysis from Real Capital Analytics.
RCA looked at how the real estate investment markets of global cities performed in the recovery from the last financial crisis. It found that the most liquid markets, defined as having the highest number of transactions and of buyers and sellers, were the first to see pricing return to pre-crisis levels.
London was the most liquid market before and during the 2008 crash, saw the shallowest decline in liquidity, about 10%, and was the first major European city to see liquidity levels bounce back.
London was not ranked as highly by investors coming in to 2020, but with the uncertainty around brexit removed, liquidity had come back to London in the first quarter of the year. RCA says when the coronavirus recedes, London is likely to bounce back more quickly than other markets.
With many of the barriers to investment that caused London to slip down the rankings removed, RCA are optimistic that London will continue its recovery when the virus crisis is finished. Yields were higher in London than in other major European cities so the city offered better returns for investors.