A lot of experts believe that real estate investments will be a key focus in the coming year. Strike while the iron is hot, they advise. Analysts highlight that real estate markets are gaining momentum amid favorable macroeconomic conditions, particularly in the United States.

Currently, there are lucrative opportunities for real estate investors that should not be overlooked. The recent drop in US Treasury yields is fueling fuel to the fire, signaling growing investor confidence in the Federal Reserve's policy. Market participants wonder if the regulator will have the zeal to go ahead with more rate cuts. This situation is influencing the housing market, where the number of pending home sales contracts has increased for the third month straight. According to the National Association of Realtors, signed contracts rose by 2% compared to the previous month and by 6.6% from a year ago.

The steady recovery in the US housing market reflects a global resurgence in real estate investments. Analysts at UBS attribute this trend to declining capital costs, improved credit affordability, and significant private capital inflows.

Analysts note that the low housing supply in the US continues to drive up prices. At the same time, commercial and residential construction remains constrained by stringent regulations and high costs. However, with changes in interest rate cycles, surprises are always possible. A combination of supply shortages and rising demand could reduce spare accommodation and increase rental yields, potentially leading to significant capital growth in the near term.

Tentative forecasts indicate that direct investments in real estate in Canada, the US, and continental Europe will yield substantial returns due to the steady growth in rental rates and declining interest rates. However, UBS analysts urge caution regarding residential properties in the United Kingdom, citing affordability issues. Besides, mainland China remains a risky venture despite recent stimulus measures aimed at stabilizing the sector.

UBS underscores logistics facilities, data centers, and telecommunications towers as promising commercial real estate investments, suggesting they could generate significant profits. In the residential sector, multifamily housing, senior living apartments, and student accommodations are identified as key opportunities.

UBS currency strategists anticipate a robust recovery in the real estate market in 2025. However, they advise investors to exercise caution and carefully consider fundamental sector indicators and regional dynamics for effective investment strategies. For market participants capable of managing regional and sector-specific risks, the current environment offers a promising entry point into a recovering real estate market, UBS concludes.