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PROFIMEX’s Outlook for Real Estate in 5,779 - תשע"ט

Backdrop of Real Estate Investments

Although the US is competing against China for the title of the world’s largest economy, it maintains its first place standing with an impressive 60% GDP gap and continues to grow. As evidence, the second quarter of 2018 saw an annualized 4.1% growth rate of the Gross Domestic Product (GDP) throughout the US —the strongest gains experiences within the industry since 2014. Growth was driven by broad gains in consumption, exports, investment and government spending. This trend indicates that favorable fiscal policies at federal and state levels may continue to drive the unemployment rate lower, leading to further job creation and wage growth.

In Europe, the end of an intense election year, which marked the end of a period of significant political uncertainty, enabled the economy to grow and shift towards center stage. It is estimated that in 2017, Eurozone growth increased to 2.4%, the highest in a decade. A slight dip to 2.2% was originally predicted for 2018, but this forecast was recently revised in light of German transactions. A year-end upside remains a veritable possibility. In the UK, by contrast, another year of BREXIT negotiation is expected to limit activity to a slightly disappointing 1.5% growth, similar to the rate experienced in 2017.