Iran's conflict is rattling global markets. Real estate investors face a perfect storm.

The Big Picture

Geopolitical tension is driving oil prices and uncertainty higher. This hits as economies already struggle with persistent inflation. Citi's Jim McCormick calls it "a pretty bad mix for markets."

Stagflation — slow growth with high inflation — is the ghost returning. Property markets are particularly vulnerable to this scenario.

“A pretty bad mix for markets.”

Why It Matters

Real estate performs poorly in stagflationary environments. Construction costs soar with inflation, but weak economic growth dampens demand. Projects become unviable.

Mortgage rates, already elevated, could climb further if central banks maintain restrictive policies. This hits residential markets directly. Sales stall, prices adjust, and developers delay launches.

In commercial property, geopolitical uncertainty freezes investment decisions. Companies postpone expansions. Real estate investment trusts face valuation pressure. No one wants to commit capital amid such volatility.