Almost everybody in the European real estate finance sector acknowledges we are in an extended property cycle. However, the 10-year anniversary of the Lehman Brothers collapse came and went last September, and real estate investors and lenders are still making the most of what they see as benevolent market conditions. But can the good times last? According to members of the Loan Market Association, possibly not for much longer.
In a survey published in May on the opportunities and challenges facing real estate finance markets, more than 45 percent of respondents said they believe we are at the peak of the cycle. Asked when the next real estate downturn will start, more than half selected next year from the options.
However, it was not all doom and gloom. At the LMA’s Real Estate Finance conference, held on 9 May in London, an audience poll asked where we are in the cycle, with a set of slightly more nuanced options. Of those in the room who responded, 69 percent said we are in a prolonged period of no growth. It seems that while many believe we are at the top, opinions differ on how long we will stay there.