Inflationary Pressure is Building

Real estate’s reputation for inflation protection will be tested in the months to come.  Several different types of inflation have already climbed into view:  Asset price inflation came first, followed by a spike in building material and energy costs. Next in line are labour and housing costs, and a broad range of consumer and producer prices that are all experiencing inflationary pressures in 2021.  At this stage in the re-opening of economies, inflation is still a good news story as a wide range of markets are responding to surging demand. The risks and opportunities associated with inflation are more subtle, as we describe in our June macro indicators deck.