R
eal estate markets are gaining momentum as favorable economic conditions create compelling investment opportunities, according to analysts. Falling U.S. Treasury yields signal growing confidence in the Federal Reserve's ability to cut interest rates further, boosting optimism in the housing market.

    Pending home sales rose for a third consecutive month in October, with contract signings increasing 2% from the previous month and surging 6.6% year-over-year, according to the National Association of Realtors. This steady recovery could mark the beginning of a global revival in real estate investment, driven by declining capital costs, improved debt availability, and significant private capital.

    Supply constraints in commercial and residential construction are creating a scarcity of high-quality properties due to stricter regulations and higher costs since the pandemic. As interest rates shift, supply shortages combined with strong demand are expected to lower vacancy rates and fuel rental growth, potentially leading to significant capital appreciation.

    UBS highlights logistics properties, data centers, and telecommunication towers as standout segments in commercial real estate, driven by e-commerce and artificial intelligence trends. In residential real estate, multi-family housing, senior living, and student housing are identified as promising growth areas.

    Direct real estate investments in Canada, the U.S., and continental Europe are forecasted to be lucrative due to robust rental growth and falling interest rates. However, caution is advised in the UK residential market due to affordability challenges, while mainland China remains a risky prospect despite recent stimulus measures.