Everyone knows that forecasting models are sub-optimal for assessing future market trends more especially when market conditions and drivers are unlike those we have previously experienced. Sentiment and confidence surveys are increasingly being used to help assess what might happen next.

Jones Lang LaSalle’s latest Q3 Investor Confidence Survey showed investor confidence softening in face of expected downward pressure on prices. And 70% of respondents expected either a market in balance or with an excess of sellers in the next 12 months, driving weaker performance. Yet surprisingly nearly 80% of respondents were expecting to be net investors over the next year and it’s this point that is probably key. As of today there certainly remains the perception that product availability remains limited and there is an excess of buyers over sellers in the prime part of the market with secondary trading still limited.

Whilst we were doing the rounds at GRI Paris in mid September and at Expo Real Munich this past week we also took the markets’ temperature.

Firstly, at GRI: “uncertainty” was the one word which encapsulated JLL’s take on proceedings, with no single theme to investor plans and short term market activity. There were plenty of concerns around the unknowns: the impact of deleveraging in the public and private sectors; the availability and pricing of bank debt even if interest rates stay low; and whether there were real risks that the massive refinancing required 2011-14 would seriously destabilise the markets. Having said all that one could find investors who would consider any market at the right price. Whilst the majority were still risk averse and in large part focused on the bigger mature liquid markets for income security and wealth preservation, a growing number were looking to secure value add opportunities to boost returns. I read this as a sign of increasing confidence, albeit in a marketplace where lower overall rates of return will be a likely feature of the market for many years.