22 October 2017
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Global Economic Policy has to control investment bubbles

15 April 15 | Richard Barkham
Richard Barkham

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In this year’s MIPIM held in Cannes, CBRE’s Executive Chairman and Global Chief Economist, Richard Barkham, expressed his views regarding a variety of issues such as Global Real estate, Savings and Global Economic Policies.

 

According to his point of view, GDP should be the center of interest when tracking the global economy. Business cycles and central banks’ policies should be critical indicators, as well.

Richard Barkham sees many more people nowadays saving rather than spending and this behavior is directly impacting global demand. He expects those conditions to alter not earlier than three to seven years’ time and expressed his belief that interest rates will remain low for a reasonable period of time.

Real Estate will continue with a slower rental rate growth and low cap rates until China moves from export lead growth to consumer growth.

He believes that the G20 needs to coordinate economic policy to smooth out investment bubbles and booms. The outlook is looking increasingly bubbly.

Richard confidently predicts the next US bubble to be in 2018 and it will be caused by development.

Banks aren’t currently as exposed as the last turn, but excessive debt is building up.

There is still plenty of runway to get projects done by 2017. He predicted that the single family homes market has pent up demand in the US and is a good place to invest.

The global economy is still overly indebted and the next downturn will feel that. When growth slows down this will hurt.

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