What are the results of the real estate market transparency index according to JLL?
- How does the level of transparency affect real estate markets and foreign investments?
- Current market transparency: Russia, America, Asia, and the Middle East
Analysis of transparency levels in real estate markets
A study conducted by JLL analyzed the level of transparency in 102 key real estate markets. The results showed that the commercial real estate sectors have significantly improved in terms of clarity, with an increase of over 80% compared to the data collected in 2012. The degree of transparency in real estate markets is a key indicator that reflects the availability of financial information about specific real estate markets in different countries. Market participants, by gaining more data, better understand potential risks and opportunities.
Research methodology
The Transparency Index for global real estate markets has been calculated by JLL for the eighth time. This research utilized both quantitative data on market conditions and survey results from international companies. This year, 115 different indicators were taken into account in the analysis, which contributed to a more accurate combination of quantitative information and survey data. In comparison, the previous study conducted two years ago used only 83 indicators.
The relationship between transparency and foreign investments
The increase in transparency is directly related to the growth of foreign investments and the active activities of business structures. Financial institutions help find the best ways to enhance transparency, while government authorities understand that a low level of information can negatively impact the attraction of international capital and long-term economic prospects.
Leaders in transparency levels
Among the countries with the highest level of transparency, English-speaking nations continue to lead. In the current study, the United Kingdom took first place, surpassing the United States, which came in second. The ranking of the most transparent countries also includes:
- Australia
- New Zealand
- France
- Canada
- Netherlands
- Ireland
- Finland
Countries with a high level of transparency
According to data published by JLL in 2014, the following countries have a high level of transparency:
- United Kingdom
- United States
- Australia
- New Zealand
- France
- Canada
- Netherlands
- Ireland
- Finland
Average level of transparency
Countries with a medium level of openness include:
Countries with a moderate level of transparency
The groups with a medium level of transparency can be classified as follows:
The importance of transparency for investors
The most transparent markets are concentrated in Europe, where numerous commercial transactions are still taking place, and there is also a strong influx of foreign capital.Market transparencyis critically important forinvestorsFrom abroad, which is clearly visible in examples such as London, Paris, and some cities in Germany. Central and Eastern European countries continue to show an increase in transparency levels, with countries like Romania, Serbia, and Hungary standing out in particular.
Excessive transparency in Russia
Moscow has managed to maintain its position in the area of market transparency and even slightly improved this indicator. Meanwhile, St. Petersburg and other cities in Russia are trying to hold on to their modest achievements in this aspect.
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Improvements in America
In North and South America, a moderate increase in transparency in the real estate sector has been recorded. In the United States and Canada, which are considered regions with a high level of transparency, changes in the indices have been minimal, which can be attributed to the already established high standards. Interestingly, among the major and relatively more developed countries in Latin America, significant shifts towards improving transparency levels have been observed since 2012.
Key players in the American market
On the American continent, the main countries that have become active players are:
- Colombia
- Peru
These countries demonstrate strong economic growth and a high influx of foreign investment in the real estate sector. Despite their achievements, none of the South American countries have managed to break into the top 20 in the overall index or its five subcategories.
The situation in the Asia-Pacific region
As for the Asia-Pacific region, improvements here can be described as stable, although it's hard to call them impressive. The index shows that none of the countries in this region made it into the top ten. The competition for the title of the most transparent market in Asia has increased:
- Singapore has managed to overtake Hong Kong.
- Hong Kong is showing a decrease in attention to the measures that have been implemented.
This negatively affected the level of transparency.
Diversity of countries in the region
The countries in this region show significant diversity in terms of transparency:
- Australia and New Zealand are at the top of the rankings.
- Mongolia and Myanmar are on the list of the least transparent markets.
In the latest transparency report from JLL, the leading countries in the region have managed to improve their positions, but most countries did not show significant shifts.
Middle East and North Africa
In the Middle East and North Africa, efforts to maintain development momentum continue. Out of the 16 markets analyzed in the report, 14 showed slight improvements; however, overall, this region remains one of the most opaque in the world. Special attention should be paid to Qatar:
- Coordinated actions are being taken to create a more open and transparent market.
- The country illustrates how international interest can contribute to tightening control over construction and compliance with safety standards.
Conclusion
In conclusion, I want to emphasize that the prospects for the commercial real estate market on the global stage are becoming increasingly promising. The data presented in the JLL Transparency Index demonstrate tangible successes in the fight for more open and understandable business conditions. Countries in Europe have achieved significant results, becoming role models, while the dynamics of change in Central and Eastern European countries also inspire optimism.
As a witness to the current changes marking a rise in transparency, I also realize that such trends do not stop at what has been achieved. The real estate market requires constant attention and investment to avoid a decline in transparency, as seen in Ukraine. It is worth noting thatforesightandavailability of informationare key to attracting foreign investment and ensuring healthy economic growth.
Key points:
- European countries are showing significant progress in increasing transparency.
- The dynamics of change in Central and Eastern Europe is encouraging.
- Transparency is important for attracting foreign investments.
- Constant efforts are needed to maintain the level of transparency.
I am confident that the continued efforts to improve transparency in real estate not only benefit current investors but also create a favorable environment for new international players. I expect that future research and investments will bear fruit, and we will see further improvements across all markets.Transparency– this is not just a requirement of the times, it is a necessary factor that contributes to the stability and prosperity of both individual markets and the global economy as a whole.
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