4 Commercial Real Estate Business Trends Expected This Year

The real estate market changes with various economic and political conditions. A lot of changes has occurred this year. The U.S. has elected it’s new President, and so there will be a lot of changes in laws and regulations as well.  There could be a lot of surprises this year in the real estate business. Here are the four trends you should expect this year in the commercial real estate business.

Non-bank lending

The non-banking lending will decrease this year. The reason for this is the risk-retention requirement that is part of the Dodd-Frank Act. It requires the sponsors of the commercial mortgage-backed securities to keep 5% of every new deal.

Interest rates

There will be an increase in the interest rate by one-quarter of a percentage point. This prediction is based on the deregulation, economic condition, etc. The Higher deficit can cause inflation and the high interest rates. Because of higher interest rates, the real estate market will be less affordable.

Financial legislation

According to President Donald Trump, the Dodd-Frank Act is a ‘disaster.’ The experts think that the law cannot be totally repealed, but its effect will be reduced.

Foreign investment

Chinese real estate investment will decrease. China has already reduced overseas investment. The Brexit will also affect foreign investment. The volatile nature of euro and pound will determine the fate of foreign investment as well.

Lots of uncertainties exist in the U.S. economy. The real estate market will see lots of surprises this year under the presidency of President Donald Trump.