(MT Newswires) -- Blackstone chairman Jon Gray suggests that property values may have bottomed out without necessarily signalling an immediate recovery. He notes that the office sector could struggle in the coming years. Gray also mentions that the multi-family housing sector could face challenges due to abundant supply.
Gray points to positive signs for the sector, such as the falling cost of capital, with the 10-year rate falling from 5% to 4.15%, which is good for real estate. Blackstone, with its $65 billion cash reserve in property, is looking to take advantage of this period to invest before the market fully stabilises. Gray compares this strategy to Blackstone's approach in 2009, when the company began deploying capital before the market showed clear signs of recovery.
On the US housing crisis, Gray attributes the main problem to a lack of supply. He points out that the number of houses built in 2023 was comparable to that in 1960, when the US population was around half that size. In his view, the upturn in new house building has not been significant since the financial crisis, leading to a significant imbalance. Gray suggested that measures such as zoning changes, tax incentives and property tax adjustments could help to increase the supply of housing.
