Growing clarity in the market’s future:CBRE’s survey tracked a significant y-o-y decrease among those lenders who answered “real estate prices will fall”, “LTV ratios will increase” and “spreads will widen”.
Real estate prices to remain stable or increase: In terms of real estate prices, a slightly higher percentage of lenders polled responded that they expected prices to increase (17%) than those who anticipated a decrease (13%). Furthermore, lenders are anticipating NOI yields to be either equivalent to or lower than those seen before the advent of the pandemic for some prime Tokyo assets.
New loan volume is set to increase in FY 2021: Regarding financing policies, real estate non-recourse loan volume was projected to rise in FY 2021 for both senior (40%) and mezzanine (71%) .
Concerns over economic stagnation remain: The greatest threat to the real estate financial market remains “a domestic or international economic shock”, with this answer given by 50% of lenders, up two points from the previous year. For this reason, lenders are expected to remain cautious.