European real estate stocks could half

 

According to a report prepared by analysts at Citigroup, European real estate stock prices could drop by 50%.  The real estate industry struggles with higher debt-servicing ratios and a slump in property valuations.  The prediction by the Citigroup analysts is based on the projection that predicted a 20%-40% decrease in asset values over 2023 and 2024.  The Stoxx Real Estate Index is down 15% in March following concerns over tighter lending conditions after the collapse of Silicon Valley Bank.  Citi analysts wrote that listed bond yields for real estate have significantly increased and reached levels that create long-term instability in business models.  Analysts at JPMorgan added that a potential further rise in yields poses a major headwind.