Over the past 25 years, yields in every commercial property sector have declined in line with short- and long-term interest rates. Recent reports suggest the decline in real interest rates is due to changing demographics, in particular, labor supply, population aging and life expectancy. How will these long-term demographic trends affect interest rates and real estate yields in the future?
Do Demographics Affect Property Yields?
Over the past 25 years, yields in every commercial property sector have declined in line with short- and long-term interest rates. Recent reports suggest the decline in real interest rates is due to changing demographics, in particular, labor supply, population aging and life expectancy. How will these long-term demographic trends affect interest rates and real estate yields in the future?